Dubai: Strong revival of regional economies driven by the trade, tourism, retail and hospitality sectors is expected to drive growth in corporate banking in the UAE and the GCC, said Rezwan Mirza, Head of Corporate Coverage at Barclays.
"The UAE is a very critical hub of the global trade flows. The country has built a very strong infrastructure to support the trade. From our perspective, we are very focused on growing our trade finance business in the region which is a major component of our corporate banking business," said Mirza.
From this year Barclays will have a more integrated approach to delivering banking services across the world. The bank is already working on an initiative that all the suffixes in Barclays banking verticals will be dropped and it will be just Barclays.
In the Middle East the bank has already started the integration process. While one regional CEO heads the entire Middle East and North Africa (Mena) region, banking verticals such as corporate banking, retail banking, wealth management and investment banking are being closely integrated.
"Although we have five verticals, we operate in very integrated mode so that the customer does not have to spend time to figure out which of the verticals will address their banking requirements. Going forward, the branding itself will reflect the integrated approach," Mirza said.
The corporate banking business is primarily focused on core corporate banking products such as trade finance, cash management or transactional banking, debt finance as well as risk management which includes interest rates, foreign exchange and commodity risk management.
With its new approach of integrating banking services, Barclays will deliver services ranging from basic retail banking services to corporate banking, wealth management and investment banking services as one entity.
In an integrated environment, corporate entities will be offered all the banking services they need. In addition, some individuals or groups managing the firm might need wealth management services, while the employees could be offered the whole range of retail banking services. Depending on the size of the companies and their varying funding requirements the bank will offer investment banking services such as advisory and capital markets.
"Our view is that by having a full platform under one regional management team and one brand we are able to focus on all customers' requirements," said Mirza.
Trade
Lending under corporate finance ranges from pure debt products such as short to long term debt and trade related financing. In a place like Dubai where trade is such an important part of the economy, the bank offers a wide range of trade financing options such as unfunded trade financing like opening of letters of credit funded and collateral free short term financing, depending on the creditworthiness of the customers, inventory financing through short term loans.
There is a huge trade flow between Asia and Africa. In this case the UAE is the most important transshipment point. Barclays has an extremely strong presence across Africa. We are able to assist our client base with trade flows into Africa.
"The reason we are focused on the trade opportunity in the region is that there is wider financing opportunities. These trading companies may require cash flow management services, forex requirements and other risk management services. The differentiation between us and other banks is that we are a global bank that has a global platform," said Mirza.
With a large number of UAE-based private sector companies emerging as true world-class companies that have growing global ambitions Mirza says demand for bank financing is on the rise.
As part of the corporate finance activities Barclays offers services to address optimum financing needs through mature capital structures.
"Our objective is to help our clients to secure correct level of funding at appropriate costs and maturities. Depending on the size of the financing requirements we involve our investment banking and syndication teams. The bottom line is to get the most appropriate terms for our customers."
In corporate banking business most companies start with short dated debts and as companies grow they require larger and longer maturity loans to match the assets. Eventually as they grow larger the companies are likely to tap capital markets. "We have the capability to involve with the funding requirements of these companies at all these stages their growth and corresponding funding requirements," he said.
Although companies are likely to face a challenging liquidity environment as a result of a number of European banks deleveraging, Mirza said Barclays is open for business in the region and the global liquidity situation will not have any serious impact on its lending activities in the UAE and the Gulf.
