The UAE's banks battle it out for media coverage.
The UAE's banking system has demonstrated exceptional resilience in the aftermath of the regional property crash.
The IMF forecast is for a 3.3 per cent real GDP growth for the UAE in fiscal 2011. This is sufficient for the banking system to generate earning growth. Abu Dhabi Commercial Bank (ADCB) delivered results for H1 2011 that exceeded market expectations, primarily due to loan growth, exposure to blue chip government borrowers and fee income.
Dubai's banks, however, are still challenged by higher loan loss provisions and slugging loan growth, as demonstrated by the 2011 operating results of Emirates NBD, with a profit decline of 59 per cent in Q3.
Facets of coverage
We monitored five UAE banks in the GCC media throughout November 2011; ADCB, CBD, DIB, EIB and Emirates NBD. Emirates NBD enjoyed the highest presence, with 300 clippings, followed by ADCB with 191 clippings, DIB (63), CBD (56) and EIB (21). Emirates NBD led the way in terms of OTS (Opportunities to See), and coverage size, followed closely by ADCB.
Emirates NBD and ADCB were the only two banks that had higher English penetration, relative to Arabic.
In terms of media type penetration, newspapers were a clear favourite for all banks, while magazine coverage did not exist at all for CBD and EIB.
Content analysis
Emirates NBD scored again by achieving the higher prominence value (subject to location of mentions, visuals and tonality), by achieving a prominence value of 0.62, which was followed closely by ADCB (0.51) and DIB (0.47).
There seems to be clear competition between the two banks that have significantly higher media presence - ADCB and Emirates NBD.
ADCB's coverage was predominately on stocks, sukuks and PR. The highlights of ADCB's coverage was on their selling of $500m in sukuks, a deal with Emaar Retail and on it being listed as one of the top 10 Arab banks.
CBD's coverage, on the other hand, was predominately on stocks, corporate and PR.
The highlights of Commercial Bank of Dubai's coverage were on its Islamic banking and sponsorship of the Al Aweer Festival. It must be noted that in negative reviews, the highlights were on its deposits plummeting.
Dubai Islamic Bank's coverage focused on CSR and PR. The highlights focused on its participation in GITEX, its acquisition by Emirates NBD and on the bank completing phase one of the Emiratisation Qiyadee Program.
Emirates Islamic Bank's coverage was primarily on its merger with Dubai Bank and on its Islamic banking. Emirates Islamic Bank also had some coverage on its sukuks with Emirates NBD.
Finally, Emirates NBD's coverage was predominately on corporate, PR and its acquisition of DIB. The highlights also included its deals with the RTA and Sheikh Zayed Programme. Emirates NBD attracted a fair share of negative exposure due to the drop in bonuses.
Conclusion
With 23 national and 28 foreign banks, the UAE banking system is highly competitive in retail, corporate, private and investment banking systems. Yet, the take-over of Dubai Islamic Bank by Emirates NBD, and EIB by Dubai Bank, as well as the sale of RBS's retail branch network to ADCB, demonstrate that excess capacity is being absorbed in the slow-growth, post-crisis environment.
Media competition is fierce, with Emirates NBD leading the way, followed closely by ADCB.
Noise is unavoidable in such a highly competitive environment. To stand out means to diversify publication genres, to boost coverage and have a niche that is repeated endlessly.
With acquisitions across the board, the banking media is busy, and it might be a ripe time to begin standing out when the merger mist fades away.
Hisham Elzubeir Research director Mediastow, Dubai
© Gulf Marketing Review 2012
