Banking
From The Report: Dubai 2016
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The banking sector is a pillar of Dubai’s economy, having provided the basis for development over the past decade. The banks serve as conduits that link Dubai to regional and global economies, and their publicly traded shares are one of two main drivers of the local stock market, along with real estate stocks. For now, the banking sector in Dubai appears to be in the midst of transition, with lenders adjusting to changing demand patterns triggered by lower oil prices and continuing to evolve their offerings and operations. While it is expected that top-line growth will be muted in 2016, banks as a group appear ready to meet the challenge of staying profitable. The emirate’s lenders exist in the wider national system of the UAE, which means they are licensed at the federal level and authorised to operate anywhere within the seven emirates, regardless of where they are based.

This chapter contains interviews with Mubarak Rashed Al Mansoori, Governor, Central Bank of the UAE; and Abdulla Qassem, Chairman, Network International.

Articles from this Chapter

Overview

Impact assessment: Lower oil prices have far-reaching ramifications
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The banking sector is a pillar of Dubai’s economy, having provided the basis for the development in the past decade. The banks serve as conduits that link Dubai to the regional and global economies, and their publicly traded shares are one of two main drivers of the local stock market along with real estate stocks. For now, the banking sector in Dubai appears to be in the midst of change, with lenders adjusting to changing demand patterns triggered by lower oil prices and continuing to evolve their…

Analysis

Risk management: Federal credit bureau aims to boost confidence in the system
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One sign of enduring strength in Dubai’s credit markets is that multiple obstacles have not hindered growth. This includes external factors, such as lower oil prices and a recent history of credit struggles. In the past year, another challenge to lending growth has been Al Etihad Credit Bureau. While in the long term this new actor is expected to enhance the lending market by helping banks to manage risk, in the early stages of a credit bureau’s introduction into a financial system, the sudden…

Interview

Staying strong: OBG talks to Mubarak Rashed Al Mansoori, Governor, Central Bank of the UAE
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Interview:Mubarak Rashed Al Mansoori Given a lower oil price and an appreciating US dollar, what challenges have emerged, and how is monetary policy being adjusted as a result? MUBARAK RASHED AL MANSOORI: While these factors have had an impact on the domestic economy, the effect has been relatively subdued. The build-up of large fiscal buffers over recent years, in addition to a well capitalised banking sector and sufficient albeit tightening liquidity, have reduced the potential impacts…

Interview

Staying strong: OBG talks to Mubarak Rashed Al Mansoori, Governor, Central Bank of the UAE
OBG
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Interview:Mubarak Rashed Al Mansoori Given a lower oil price and an appreciating US dollar, what challenges have emerged, and how is monetary policy being adjusted as a result? MUBARAK RASHED AL MANSOORI: While these factors have had an impact on the domestic economy, the effect has been relatively subdued. The build-up of large fiscal buffers over recent years, in addition to a well capitalised banking sector and sufficient albeit tightening liquidity, have reduced the potential impacts…

Interview

Non-cash designs: OBG talks to Abdulla Qassem, Chairman, Network International
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Interview:Abdulla Qassem To what extent can the National Innovation Strategy (NIS) and Dubai Smart City initiatives stimulate e-payment expenditure and awareness? ABDULLA QASSEM: With the launch of the NIS during the “Year of Innovation” in 2015, many governmental initiatives, such as Dubai Smart City and the Dubai Now mobile application, have helped to successfully meet the challenges of an ever-changing marketplace and have helped shape the region’s payment services industry. For…

Analysis

Branching out: The emirate’s banks are exploring new territories as they strive for greater global participation and integration
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One of the core features of Dubai’s banking system is self-reliance. In what is generally a well-capitalised part of the world, lenders have been able to minimise their participation in global lending markets, and have not historically experimented with unconventional foreign securities or worried about what would happen if international credit markets were to tighten. However, conditions are changing as Dubai, as well as the UAE as a whole, increasingly tests the waters of global markets, and…

Analysis

Prudent lending: Intense competition across the sector has seen the withdrawal of several foreign players
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The emirate’s banks have always considered lending as a primary activity thanks to a prudent strategy that has discouraged them from chasing less-proven and riskier alternatives. This policy paid off during the global financial crisis, as there were scant direct exposures to the toxic derivatives that sank some of the world’s biggest lenders. Lending market data since the crisis suggest that the emirate’s banking sector has retained its tight focus on lending. The lending market in Dubai looks…