NBAD plans to make inroads in emerging markets

Abu Dhabi : The National Bank of Abu Dhabi (NBAD), the second largest UAE bank by total assets, will double its presence in Egypt and Oman in the next three to four years as part of an expansion plan also aimed at increasing the bank's presence in Asia, a senior executive said yesterday.

Qamber Al Mulla, senior general manager of NBAD's International Banking Division, said the bank will add 23 branches to the existing 27 in Egypt by 2014 and double its seven branch network in Oman by 2013 as it aims to take advantage of markets with high demand for retail banking.

"We are looking towards the Arab world to be a local bank," said Al Mulla. "But if we go to the international arena, we act as a wholesale bank. We want to support foreign companies doing business in the UAE and vice-versa."

NBAD opened its first branch in Hong Kong this week, a move Al Mulla said is designed to give the bank access to the Chinese market.

"We thought, going to Hong Kong, we can be very close to China, and then we can enter China," he said.

International operations contributed 19 per cent of NBAD's revenues and 10 per cent of its profits in the third quarter. The bank's profits jumped more than 40 per cent to Dh914 million in the quarter compared with the same period last year despite setting aside Dh284 million in provisions against bad loans.

"Overall, the bank has delivered positive numbers in line with expectations and has succeeded in maintaining a clean book relative to peers," said an HC Securities report released in November.

The bank, rated among the 50 safest banks in the world by Global Finance magazine, has presence in 11 countries outside the UAE and is now studying its plan to open branches in Turkey, Syria, Lebanon, Morocco, Malaysia, Indonesia and Shanghai.

"We don't go to a market where we feel we will be losing money," said Al Mulla. "We open international branches to support the head office, not to be a burden."

NBAD has had a pending application for a licence in Qatar, but authorities there have yet to respond. Bank officials, including CEO Michael Tomalin have asserted their preference for opening new branches in emerging markets rather than acquiring existing banks.