Business | Banking

Arab banks reorient their priorities as they look east

UAB seeks to forge consensus among 330 members on new opportunities

  • By Gaurav Ghose, Financial Features Editor
  • Published: 00:00 May 31, 2010
  • Gulf News

Change of focus
  • Image Credit: JAVED NAWAB/Gulf News
  • Sulaiman Al Mazroui, board member of Emirates NBD Bank and chairman of the General Assembly of the UAB, says the union is trying to bring about greater integration among its members.

Dubai: Arab banks have long neglected the East and their priority now is to focus towards the fast-developing region, said Sulaiman Al Mazroui, board member of the Union of Arab Banks (UAB), in an exclusive interview with Financial Review.

"We shouldn't just concentrate on the West, [but] explore opportunities in India, China, Japan, the Far East, Malaysia, Indonesia [and] Singapore," he said. "There are huge developments there."

The UAB brings together 330 banks in the Arab world and provides solutions for issues directly related to the financial sector and banking. It discusses plans to improve the functions and performance of Arab banks and create a way to support and unify them. Al Mazroui cited the example of creating a unified data system that the member banks can tap to get information on various issues.

UAB is involved in myriad activities such as organising seminars, conferences, forums, bringing in experts to discuss topics ranging from risks, credits, performance of staff, besides training staff on various issues related to the market and the banking system.

Crisis control

During the latest econ-omic crisis, several UAB events were held in Dubai because of its position as a leading financial hub and a prominent business centre, he said, adding that Arab banks wanted such events to be held in the city.

However there is room for improvement when it comes to cooperation and integration among the banks, he adds. "The UAB, because of its nature of being an active union, it is trying to pave the way for more integration. Integration is something beyond just a union," he said.

Arab focus

Al Mazroui is also the general manager for group corporate communications at Emirates NBD. "It [integration] has actually to do with the individual countries in the Arab world and, importantly, it has to do with the political issues and strategies," he said.

When it comes to Arab banks investing in other countries, the UAB does not interfere, he said. "At the end of the day, expansion strategies are individual decisions of the countries and banks. But, yes, UAB is always in support of Arab integration and expansion of Arab banks into various Arab countries."

Al Mazroui said one of the aims of the UAB is to have Arab countries actually integrate in their banking system to make them benefit from the huge captive market rather than operate in ‘silos'. There are a lot of opportunities for Gulf banks to operate in the Levant, in Egypt or in North Africa or [broader] Africa — and vice versa, he said.

"We don't see a lot of banks, apart from Lebanon, from North Africa, operating in the Gulf, simply because they are small. They need to be developed into bigger banking conglomerates. So if we from the Gulf start to explore larger Arab countries, larger markets — expand, let's say, into North Africa — not only do we benefit going there, but in the process we also help their own banks adopt and develop more sophisticated banking systems.

"Even we can benefit — if an Egyptian or a Moroccan bank comes [to the Gulf] — because they definitely have experience from a different market orientation."

 

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