Emirates NBD has become the first local bank to announce the launch of accounts denominated in the Chinese currency for private individuals.
Emirates NBD first with yuan accounts
Emirates NBD yesterday became the first bank in the country to announce the launch of Chinese currency accounts for private individuals in a bid to service the country's rapidly growing ties with China.
The bank said the products, open for businesses and individuals, are intended to allow customers with links to China to conduct easier trade settlements and the option of holding their balance in the currency.
The step will also help individual investors and small businesses to hedge against the risk of the yuan's appreciation against the US dollar.
"The enormous increase in UAE's bilateral trade with China and the resultant fast-growing Chinese-related business and resident population in the country have turned the focus significantly on the world's second-largest economy," said Suvo Sarkar, the general manager of retail banking at Emirates NBD.
The bank's market research indicated it was the "opportune time" to introduce yuan-denominated products, said Mr Sarkar.
Emirates NBD's move is a reflection of the tightening in commercial ties between the UAE and China in recent years.
Two-way trade has advanced fivefold over the past decade from US$3.12 billion (Dh11.46bn) in 2002 to $15.6bn last year, according to data from the Ministry of Foreign Trade.
The services include current accounts, call accounts and fixed deposits, all denominated in the yuan.
The accounts allow remittances from small and medium enterprises and other customers through branches and enable them to carry out daily banking in the currency.
But Emirates NBD also wants to tap into appetite from individuals with financial ties to China and investors wanting exposure to one of the world's fastest-growing economies.
Customers will be able to transact and build their savings in the yuan over the medium to long term. More than 200,000 Chinese are now estimated to be living in the UAE, with many conducting regular business with their home country.
"The yuan currency-denominated account products will also enable affluent investors to diversify their currency portfolio and participate in the attractive China story by investing in a wide range of yuan denominated investments," said Mr Sarkar.
Several other banks operating in the UAE have sought to carve out a slice of the lucrative Chinese market in recent years.
Banks operating in Dubai including HSBC, Standard Chartered and Mashreq, have begun offering business banking services denominated in yuan. Emirates NBD, Union National Bank and National Bank of Abu Dhabi have opened offices on the Chinese mainland.
Last March, Emirates NBD became the first bank in the Middle East to issue a bond sale denominated in yuan.
The bank's plans also link into a wider bid by Dubai to become an offshore trading centre for the currency.
China started implementing a strategy in 2009 to internationalise the currency, granting powers to Hong Kong to become the first location outside mainland China for clearing yuan.