Emirates NBD is to integrate corporate client accounts, the first of its services to be combined after its merger last year.
Emirates NBD makes corporate changes
Banks in the UAE are expected to report a profit growth of more than 30 per cent in the first half of this year as lending across the region surges, the head of the country's largest bank reports. Ahmed Humaid al Tayer, the chairman of Emirates NBD, said the banking sector was headed for good results. "The banking sector is expected to post profit growth of between 30 and 45 per cent in the first half," Mr Tayer said. "We will be on the higher side of this."
Mr Tayer is also chairman of the Commercial Bank of Dubai, and deputy chairman of Emirates Banks Association. Emirates NBD reported a 36.8 per cent profit in the first quarter of this year, which reflected a surge in corporate and retail lending as the second-largest Arab economy cut interest rates in line with the US Federal Reserve. Banks in the world's biggest oil-exporting region have been growing rapidly as economies bloom on a near seven-fold rise in oil prices since 2002. Gulf governments have poured billions of dollars into developing infrastructure, property and industry, creating massive lending opportunities for banks.
"This growth [in profit] is going to be driven by investments by the government and the private sector... and the growth in the economy," Mr Tayer said. The UAE's first consolidated bank, Emirates NBD, has also completed integrating its corporate accounts and is set to integrate its other services by early next year. Corporate clients have invested about Dh130bn with Emirates NBD, which accounts for about 40 per cent of the banks' total financial assets and nearly half of the company's profits, said Mr Tayer.
The consolidation means that corporate clients can receive services from a unified system regardless of which bank they opened their account with. Emirates NBD stocks began trading as one in October; however the two banks continued to function as two separate brands, and the legal merger has not yet been completed. Jan Henrik Kraus, the general manager of integration, said the company would integrate its various information technology systems with one it had been developing to replace an existing older version. Emirates other banking services, such as credit cards, checking and savings accounts are to be integrated when the legal consolidation is completed and the new technology is in place, Mr Tayer said. Even though the company is developing a new logo, its name will not change, he said. Emirates NBD became the country's largest bank by asset after its merger. The consolidation also gave the new company the largest ATM presence, with 475 machines and 110 branches in the country bearing either Emirates or NBD names. By late this year or early next year, all the facilities will bear the Emirates NBD name and new logo that is in development. Analysts have called the UAE banking market crowded and in need of consolidation, but Emirates Bank and NBD Bank have so far been the only two companies to merge. Mr Tayer said the merger had given the new entity muscle to achieve grander goals. "We want to be the largest bank in the Middle East," he said. However, the bank is not in merger discussions, opting for a growth strategy that involves opening new branches, including in Singapore and Beijing, said Mr Tayer. Most UAE banks had aggressively increased their branches across the country, but larger companies were also looking outside the country. National Bank of Abu Dhabi, for instance, planned to open branches across the GCC, Egypt and Asia this year. Emirates NBD will report its second quarter results in a few weeks. * With Agencies @Email:email@example.com