DUBAI: Emirates NBD posted a strong set of numbers with net profit doubling for the first nine months of this year supported by industry leading growth in retail banking and consistent decline in provisions. With just a few weeks left to the year end the bank is confident of a repeat of the strong performance in the retail business for the year ahead.
“We have had an excellent first 9 months for our retail business. Our revenues have grown by 9 per cent and our balance sheet has grown even faster. Our market share for all products is growing consistently,” said Suvo Sarkar, General Manager — Retail Banking and Wealth Management at Emirates NBD.
ENBD’s retail asset growth of nearly 20 per cent is significantly above the market, and the bank expects to continue to outperform the industry. Bank’s consumer lending grew 13 per cent quarter on quarter in the third quarter and by 18 per cent from end 2013, with the books getting a temporary boost from initial public offering (IPO) leverage.
“We have seen a healthy demand for IPO leverage from our affluent customer base, primarily private banking customers. We expect to see this demand continue, especially with our efforts to make IPO investing easier through digital channels,” said Sarkar.
ENBD has a number of pioneering initiatives in digital delivery of banking services. It recently introduced IPO application capability on its digital channels including its network of ATM machines. Over a third of the bank’s customer base are active users of online banking and mobile banking platforms and its digital transactions are growing at more than 20 per cent, outpacing branch transaction growth.
The division has seen significant growth in low cost deposits. With interest rates expected to go up in the medium term, Sarkar expects to see a gradual transition of the liability book of all Retail banks from low cost deposits to fixed term deposits. However, he sees CASA (current account and savings account) balances continue to grow very strongly at around 16 per cent.
The bank recently launched new customer segment ‘Beyond’ a new emerging affluent segment. This segment includes individuals in the salary bracket of Dh15,000 to Dh50,000 or with savings balances of Dh100,000 to Dh500,000, represents about 20 per cent of the banking population in UAE. The new proposition offers a comprehensive banking solution with free banking, bonus interest on savings and deposit products, preferential rates on loans, premium waivers on insurance plans as well as a range of lifestyle rewards.
ENBD’s wealth management business has posted a growth rate in excess of 25 per cent year on year. “We have made significant investments in recent years in building a product platform across all asset classes and in training and certifying our relationship managers for our Private clients and Priority customers,” said Sarkar.
With strong in-house research capability, growing number of international partnerships and ENBD’s brand equity in the region, the bank expects to grow its wealth business domestically and regionally.
With a current market share of 22 per cent, ENBD is largest bank for SMEs in the country and provides a complete suite of transaction, lending, trade finance, forex and investment products. The bank’s network of 12 Business Banking centres and 100 branches and a team of over 120 dedicated relationship managers and officers provide professional banking services to thousands of SME customers across all the emirates. “Smart Business is our online banking service tailored for SMEs to conduct banking transactions safely 24 by 7. RISE, our networking portal for SMEs has been a success since its launch last year. In the past 2 years, we have enhanced our focus on SME lending through a dedicated relationship and credit team and we are seeing very good results already,” said Sarkar.
The asset book of the bank’s SME segment as well as that of Emirates Money, the bank’s small business financing subsidiary, has been witnessing a healthy growth of 25 per cent.
Sarkar said the retail delinquencies in the industry are at their historical low this year. “Our asset quality continues to be robust, and the overall loss rate in our retail book is fully within our risk appetite. This gives us the confidence to continue to grow our asset book, particularly in the backdrop of a rapidly improving UAE economy,” he said.
