Sunday, May 04, 2014

Dubai: Emirates NBD’s Retail Banking and Wealth Management business has had a fantastic first quarter with 13 per cent growth in income. The bank expects to see the positive momentum continuing through the rest of the year.

“The growth has been driven not just by the positive sentiment in the market but also by the huge amount of work we have done in the past two years in improving our products, processes and service levels,” Suvo Sarkar General Manager — Retail Banking & Wealth Management told Gulf news in an interview

The bank saw an impressive retail loan book growth and expansion cheaper funding from CASA [current and savings account]. The retail asset growth is supported by a resurgence of retail loans in the UAE; credit card business is seeing a strong growth at a pace of over 25 per cent supported by partnerships like Skywards and Manchester United. Personal and auto loans are also growing at double digits. On liabilities, the bank’s CASA growth continues to outpace the market based on the strength of its distribution network.

“The growth story for retail banking is here to stay. Retail banking revenues are growing at 10 per cent in the UAE, and there is room for all players to grow. Increased competition is good for the customer,” said Sarkar.

While rising competition in the market is a reality which everyone has to live with, Sarkar sees clear advantage for Emirates NBD in terms of customer loyalty and the extensive network the bank has.

“Our biggest advantage is the loyalty and trust of our customer base driven by our brand value and our 50 year heritage. Add to that our extensive networks, helpful frontline staff, product range, and the convenience we provide through our mobile and online channels,” he said.

Better understanding

Sector wide developments such as the Federal Credit Bureau and the E-Wallet are expected to be launched sometime this year. The bank sees both these as great initiatives that will take the banking industry forward in the UAE.

“The Al Etihad Credit Bureau will help banks get a better understanding of their customers and avoid excesses of the past. It will also assist customers with strong credit history to get a better pricing on their loans. The E-wallet is an industry wide initiative that will offer convenience in payments to customers and help reduce cash in circulation, in line with the vision of the UAE government,” Sarkar said.

With property prices recovering substantially in the country mortgage business is becoming active again. Emirates NBD is conservative in its mortgage lending policies. Keeping in line with the central bank regulations based on clearly defined loan to value ratios, the bank will lend only to end user customers. While significantly high cash transactions are expected to impact the property valuations in the market, the bank believes that the end user market is likely to remain sober and will be largely driven by demand and supply factors.

“We believe cash transactions represent about 70 per cent of property transactions on the market today. While property valuations are affected by cash transactions banks are being conservative in their assessment and lending criteria. The majority of our lending is to our end users,” said Sarkar.

By Babu Das Augustine Deputy Business Editor

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