Banking
From The Report: Dubai 2015
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Dubai’s banking sector, which forms part of the wider UAE banking system, has continued to recover since the global financial crisis. Banking sector assets climbed 13.1% in 2013, from $487bn to $552.5bn, while deposits rose from $318bn to $348bn, a 9.5% advance, and capital adequacy ratios remained strong, at 18.3% overall. New regulations designed to protect financial institutions from systemic risk, including caps on lending to government-related entities, have been put in place, while single borrower exposure has been limited to 25% of available capital. A growing expat population and favourable exchange rates have supported growth in Dubai’s remittance industry, while the Dubai Gold and Commodities Exchange has seen strong expansion of forex trading activities in recent years.

This chapter contains an interview with Peter Baltussen, CEO, Commercial Bank of Dubai.

Articles from this Chapter

Overview

New legislation should stabilise Dubai’s banking sector
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The banking sector in Dubai is part of the wider federal system covering the UAE, as banks from all seven emirates are authorised to operate across the country. The list of licensees is long, and banks are typically well capitalised and – in the current economic climate – keen for quality credit opportunities, creating a highly competitive environment. In 2014 lenders continued the process of distancing themselves from the problems left over from the global financial crisis and credit issues…

Interview

OBG talks to Peter Baltussen, CEO, Commercial Bank of Dubai
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Interview:Peter Baltussen How could external and internal risk factors affect Dubai's lending performance in 2014-15? PETER BALTUSSEN: Although yearly loan growth appears to be registering at about 10% – which is quite high as compared to the previous five years – we believe it is manageable from a capital and liquidity perspective. All banks have now prepaid the Ministry of Finance tier 2 capital notes, and are focused on continuing to build up reserves. The Central Bank of the UAE has…

Analysis

Dubai’s loan recipient profile shifting, though overall credit growth lower than expected
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Banks are poised to face competitive conditions in the UAE’s lending market in 2014 and 2015, due to factors including new regulations, supply-demand dynamics and the sheer number of players looking to lend. The end result is likely to be muted credit growth and a contraction of net interest margins. Loan growth came in at 9.6% in the first 11 months of 2014, on course for the biggest annual increase since 2008, according to the Central Bank of the UAE (CBU), but was expected to soften in 2015. Big…

Analysis

Sending money abroad a key economic activity for Dubai’s migrant workers and the financial system
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Given the importance of expatriate workers in the UAE, remittances are a key part of both the economy and the financial services sector. They are also an aspect of the global financial system that has received greater attention of late. Remittances now surpass the value of total foreign development aid and are fast approaching that of foreign investment, according to a 2014 study conducted by the Wharton Business School. Financial services firms and governments in the world’s key remittance corridors…

Analysis

Dubai’s eastward-looking currency exchange drives derivatives trading growth
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The Dubai Gold and Commodities Exchange (DGCX) has seen strong expansion of forex trading activities in recent years, driven by growth in Indian rupee futures and a successful diversification strategy. In a bid to capture a larger share of global forex trade, the exchange launched several new products in 2014, including diversified rupee instruments and new emerging market currency futures. Plans are also underway to introduce Chinese renminbi – or yuan – futures, following the launch of a renminbi…