Dubai: At a time when many foreign banks have either exited or are in the process of winding up their retail banking business in the UAE, Standard Chartered is determined to be an active player in this highly competitive business segment.
Jaydeep Gupta, a Standard Chartered veteran of 24-years heads the bank’s retail banking division in the UAE. The UAE is one of the bank’s major markets globally and accounts for nearly half of Standard Chartered’s operating income generated in the Middle East region.
Gupta believes that the UAE retail business is a fantastic franchise. In 2013 it did extremely well, though it was a fairly difficult year for the Standard Chartered group across the world. Income from the UAE consumer banking business grew nearly 15 per cent last year and the operating profit grew 20 per cent. The bank’s balance sheet showed strong expansion with assets growing at 20 per cent and deposit at 10 per cent.
“The first quarter of the year ended very well. I think the momentum is going on very well for us with operating profit growth at around 15 per cent with business doing better than last year , balance sheet expanding with strong growth in assets and deposits,” said Gupta
The UAE retail business of the bank has a balance sheet size of $5 billion (Dh18.4 billion); of this $4 billion is CASA [current and savings account]. In 2014 Gupta aims to drive growth in five key areas such as, high value customers, wealth management, retail analytics and cross selling and enhancement of online capabilities.
“We want grow the customer base of our high value customers. Premium segment of customers is something that we are going to focus on,” said Gupta.
Gupta is clear on the bank’s capabilities and limitations in the UAE market. With a limited branch network of 11 he plans to take on local banks that are far ahead in branch network with premium products and online services.
Online platform
The bank is working on a project to deliver full banking services online to its selected existing customers without them needing to visit the branches or providing additional documents. “For example for a loan top-up for an existing loan customer, all he needs to do is two clicks and one tick on our online platform,” he said.
The bank has piloted the service offering for about 1,000 customers and will be expanded to more eligible customers. The bank has also plans to extend the offering to mortgage customers with minimum paper work.
Retail banking business in the UAE has been growing in double digits partly due to the relatively low base as banks deleveraged their balance sheets for nearly 3 years, but more importantly, the retail financing in the UAE has picked up pace with the strong economic revival.
“As a rule of thumb, retail financing has to expand double the rate at which real gross domestic product is growing. In the UAE, the economy is growing at about 4.5 per cent. So, the big growth we are witnessing is partly because of the strong economic growth while part of it could be attributed to the low base effect,” said Gupta.
