Emirates NBD set to launch private banking operation
Emirates NBD, the UAE's largest bank by assets, sees a "strong opportunity" in the private banking arena and has already recruited a 50-member team as it prepares to offer new wealth management products, a top executive said.
The bank will officially launch private banking operations tomorrow.
"The timing is right. In times of crises, there's always going to be opportunities. We see a strong opportunity in the private banking arena because who really has a strong private banking offering among local banks?" Chief Executive Rick Pudner told Emirates Business.
Pudner sees opportunity in the fact that "quite a few people perhaps have become more uncomfortable with the traditional private banks", saying that "trust has been damaged". He sees an opportunity to pick up "overflows from there".
"We have recruited a very strong 50-member team in private banking over the past few months. We have been developing investment products, capital guarantee products and general liability products. We think we have got a really good suite of products that will attract investors under the umbrella of our brand.
"NBD had a private bank historically. What we have done in the merger is have a rethink of that model and look at the progress they have made and build on it to be able to cater for international savvy investors who want to come a little closer home," Pudner said.
UAE banks are "extremely well capitalised now", Pudner said adding that ENBD's Tier 2 capital adequacy ratio now stands at 16.4 per cent. "So it's pretty solid," he said.
"The Abu Dhabi banks have raised more Tier 1 capital. That is under discussion now generally within the banks in Dubai on how we can go about doing that. But we haven't finalised anything yet," he said.
UAE banks' loan growth has shrunk, Pudner admitted, "but we've seen a shrinking on the demand side as well". ENBD registered a three per cent increase in disbursals in the first quarter of this year compared to the fourth quarter of 2008, he said, "so there's still some movement".
"The fact of the financial crisis is that credit is a little more complicated to come by and that's a natural reaction, be it an unwanted one. I think banks have had time to revaluate the situation and they've obviously tightened the credit criteria. So that has excluded a few people that it used to include. But the credit market is still open and banks are open for business," he said.
Expansion plans
ENBD's focus is on a "larger footprint" in Saudi Arabia and the UAE, especially Abu Dhabi. "I think there is scope for having a bigger bank that has its home in the Middle East. The GCC is obviously our backyard and our expertise is here. We recently opened our capital markets business in Saudi Arabia and that is a great part of our strategy going forward. We would love to have a few branches in Saudi Arabia, and that is part of our ultimate ambition," Pudner said.
"We're also very adamant about growing our branch presence in the UAE and that will continue."
ENBD has applied for branch licences in India and it is upgrading its branch in Singapore. "We applied for the India licence late last year, or beginning this year. We view India as being extremely important, especially given its connectivity with the Gulf. We've had a back office there for 10 years. We will be eagerly waiting to hear back from the Reserve Bank of India to see how many branches they will allow us. We are confident we can offer India huge value.
"We're also looking at a rep office in China, basically to keep our eyes and ears open to see what develops in Asia."
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