Emirates NBD Sees 2013 Retail Revenue Up 15% on Dubai Rebound
Emirates NBD PJSC (EMIRATES), the United Arab Emirates’ biggest bank by assets, seeks to boost revenue from its retail business by as much as 15 percent next year and has board approval to hire 200 staff to expand the business.
Revenue will be driven mainly by the bank’s small and medium-sized company business as well as growth in personal banking products like credit cards and wealth management as Dubai’s economy rebounds, Suvo Sarkar, Emirates NBD’s head of retail banking, said in an interview in Dubai yesterday. The company will also add relationship managers in its small and medium enterprise business and sales staff, he said.
“Retail is a key growth sector for the bank,” Sarkar said. “You will see us being more aggressive on small and medium enterprise lending in the future than we have been in the past,” he said.
Banks in the U.A.E., the second-biggest Arab economy, are seeking to increase their retail businesses, including auto, personal and home loans after the global credit crisis pushed large companies to cut back on borrowing. Emirates NBD’s revenue from retail banking made up 43 percent of the total in the third-quarter and grew 15 percent in the nine months through September to 3.28 billion dirhams ($893 million), according to its results.
The Dubai-government-controlled bank has more than 50,000 small and medium-sized companies or SMEs as customers, with a 24 percent share of the SME market, Sarkar said. Emirates NBD had 22 billion dirhams in loans and deposits from SMEs, with loans making up about 10 percent of the total, he said.
“Whether it is the SME business, the affluent segment, personal banking, all of those are growing at double-digit rates,” Sarkar said. “Retail spending has grown 23 percent this year on our credit cards and loss rates on them are at historical lows which is a sign of confidence in the economy.”
Dubai, the second-biggest of seven emirates in the U.A.E., is recovering from a crash in property prices, helped by a rebound in tourism, trade and transport. Dubai’s gross domestic product is expected to accelerate to 4.5 percent in 2012 from 3 percent in the previous year, the government said in February.
Emirates NBD also aims to increase retail customer deposits by 20 percent next after a 14 percent rise in September from a year ago to 86.1 billion dirhams, according to Sarkar.
“Our biggest challenge is getting service quality to our customers and our single biggest effort in the last six month and for the next 18 months will be to fix service,” Sarkar said.
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