ABN Amro has many plans, including a network expansion in the UAE. Speaking to Gulf News recently, the newly appointed country representative of the bank, Jan Willem Van den Bosch, scotched the perception in the market that ABN Amro has not been aggressive in the retail segment.
We are the fastest growing bank in the credit card business and we offer one of the lowest interest rates for personal loans, Jan Willem pointed out.
On the plans for the DIFC presence, he said that ABN Amro's top management team is in town to attend the Word Bank-IMF annual meetings and they would definitely take this opportunity to hold talks with the DIFC top brass in this regard.
These are excerpts from the interview:
Gulf News: Why have you moved into the retail market in a big way?Jan Willem: We have the resources to grow in this market. In the last two or three years we have been extremely successful in growing in the retail market. We will even continue to do so and if you see the credit card market, we have been clocking the highest growth in the last quarter. Of course, we will have to be extremely careful managing this segment because there are always challenges in fast growing segments.
In the personal loan market, yours is one of the lowest rates. Even the Federal National Council (FNC) has sounded its concern on the growing personal loan portfolio. Don't you think that there is unhealthy competition in this particular segment?It is true that we also want to be part of the growing market in order to stay profitable. However, we have to apply our own checks and balances when we lend. We won't over-stretch the credit standards. From my global perspective or the micro-economic perspective, it will be in nobody's interest to see people being over-leveraged.
What are your views on the buy-out of personal loans from other banks?Though our rates are considered to be one of the lowest, don't think that our approval rates too are high. The number of people we actually lend to need not be necessarily high as our competing banks because we don't want to over-leverage the business.
We do buy out or top up loans, but here also, our rules apply strictly. On the foreclosure charges, we also charge as high as 4.5 per cent or even five per cent.
Do you think there is enough room here for corporate lending to grow?Corporates are in a growth mode as is the country's economy. Corporates themselves may be cash-rich. But with the expansion taking place in all spheres, there will come a time when the corporates will need more funding for their expansion needs. We are ready to finance corporates provided there is trust and understanding.
The UAE is overbanked and in the present scenario of excess liquidity, the banks can look at helping grow the regional economy and financing regional clients from the UAE as well as outside. With the setting up of DIFC, this trend will gain momentum.
Did ABN Amro take part in the bid to form the Trade Bank in Iraq?ABN Amro did bid for that. We were shortlisted too. Let me tell you that we were the only bank to bid for the mandate alone, without a team. However, we can still look at an opportunity in Iraq. Dubai is best positioned to benefit from Iraq's reconstruction.
Are the foreign banks cutting down on corporate assets to accommodate more retail assets? We don't want to backtrack like some other multinational banks seem to be doing. Dubai is the regional hub for GCC and other regional markets. We have brought trade finance solutions, cash management solutions, advisory to project financing because we need expertise on the ground, be it in the UAE or the region.
Have your assets been growing compared with the previous year or half year?They have always been growing.
The Central Bank recently announced that foreign banks can expand their branch networks. Will you be keen to do so?We will be very keen to expand our branch network. We have now three branches in the UAE.
Why didn't you utilise the facility to set up eight branches?That also has not been that easy as far as approval from the Central Bank is concerned. However, let me say that we are very keen to expand the branch network substantially.
What are your plans for DIFC?DIFC is very much on our minds. We are studying it and I know we have a variety of options to look at within the DIFC, including Islamic finance. Our senior management people are going to be here and they will certainly discuss the matter with the DIFC top brass. The DIFC is very much on our agenda.
On the mortgage market?We need clarity on this issue from the regulatory side and until that time, we do not want to enter this segment.
What other areas you are interested in?We were the advisors for the government in the Dh1.5 billion bond issue. We will be keen to do such jobs for government or for that matter, any corporates which intend to issue bonds.
There is a perception that ABN Amro has never been aggressive in this market. Can you comment?That perception is absolutely wrong. We may not have been sharing what we do with the outside world. I think we will have to be more communicative to rectify this perception. We are very well positioned in a variety of markets where we can grow.
Can you brief us on ABN Amro's product mix?If you look at our three main segments today, we have corporate, where we have local clients, regional clients and global clients. We have long-standing relations in many of these businesses. We are particularly interested in trade, construction, etc. We are also looking at consumer trade, IT, telecom and oil and gas.
We also look at businesses within financial institutions seriously. The second segment is the consumer sector, which is a fast growing sector and the third segment is the private clients business. Here, we deal with high networth individuals for whom we have tailor-made solutions. Of course, there is a lot of wealth in the Middle East and we certainly want to be part of it.
Do you think investors from this region have parked huge sums outside?There are signs of liquidity coming back to the region from United States and Western Europe to be invested in this part of the world for various reasons.
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