Standard Chartered UAE continues steady growth in consumer banking

Standard Chartered, the British lender with a major presence in the UAE, continues to witness growth in both deposit and asset size as the local economy recovers with visible signs of pick up in the property and other sectors.

UAE Central Bank data suggests that overall deposit base of lenders have been growing between three and 3-1/2 per cent in the last one to two years. Standard Chartered’s growth in that regard “is in line with the market,” said Khalid Al Gibaly, regional head of consumer banking, UAE and Middle East.

Looking at the asset side, the bank has been active in segments such as small and medium businesses and mortgage lending, sectors which the government considers as integral to the economy, said Al Gibaly, adding that the bank is one of the leading players in the property mortgage sector. “Because of that our share of assets compared to market growth is several multiples,” said Al Gibaly. “Now assets have grown last year by 6 to 7 per cent and our growth has been in double digits, closer to 20 per cent on the asset front—but driven by healthy assets in SME, in mortgage lending, which is secure. That really is how the bank has been performing and until today continues to be very strongly liquid.”

Last year, the bank said, its mortgage lending book grew 60 per cent year on year, more than any other lender in the UAE.

Based on the current market size, which is “very different from what it was in 2008-2009 and is probably back to where it was prior to 2008-2009” Al Gibaly said that in terms of their revenue contribution, the consumer banking division estimates its market share to be around four per cent.

On the Central Bank’s new limits on mortgage — 75 per cent on expat borrowers and 80% on nationals the head of consumer banking feels it would have a low impact on its business.

The mortgage bookings show that the bank is already operating at similar loan to value ratios.

“So the majority of our bookings today, certainly over the last one or two years have been in the 70-75% space,” said Al Gibaly. “For a bank like ours, which is already, kind of balanced from a credit policy perspective is going to be at best marginal. There will be some impact but it won’t be a massive [one].”

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The Central Bank’s plan to start the long awaited Federal Credit Bureau in the third quarter appears to be “stretched,” according to Khalid Al Gibaly, the regional head of consumer banking at Standard Chartered. The bank is currently setting up the system necessary to comply with the proposed bureau.

“We are actually doing it, we have allocated monies,” he said. However he believes that proposed third quarter for it to begin functioning looks a bit ambitious.

“Is that going to happen? Time will tell,” said Al Gibaly. The bank, he said, is doing its best because it has to comply to the regulators.

“We are working towards that date—but it is a very stretched date — and there’s a lot of complex requirements and banks which are larger and have a significantly larger customer base will actually have a much more difficult task — to ensure that the data is clean, selective, the pipe is built to do the reporting on a regular basis.”,