UAE Exchange says it will open in 30 new markets by 2014, as it looks to capitalise on the growth in the global remittance business.
UAE Exchange set to double
The UAE Exchange plans to more than double its overseas footprint in an attempt to capitalise on a boom in global remittances.
The money-transfer company currently operates 521 branches in 24 countries, and plans to launch in 30 new markets by 2014.
"By that time, I think we should be in 54 countries, and close to 2,000 locations," said YSudhir Kumar Shetty, the chief operating officer for global operations at UAE Exchange.
The company, which launched in 1980, already operates in the UK and Ireland, and Mr Shetty said it was considering moving into other European countries such as Italy, Germany, Spain, France and Portugal.
"We are looking to expand into the [EU] countries, we are also looking to expand in Africa. In both these markets, both organic and inorganic growth, we are looking at," he said.
The money-transfer industry has bounced back in the aftermath of the global downturn.
According to the World Bank, remittance flows to developing countries stood at US$325 billion (Dh1.19 trillion) last year and are forecast to grow to $404bn by 2013.
In the UAE, foreign workers sent home an estimated Dh10bn a month during the first quarter of this year, about 10 to 15 per cent more than in the same period last year.
The UAE Exchange faces heavy competition in its home market, notably from big players such as Al Ansari Exchange and Al Ghurair Exchange.
According to the Central Bank, the UAE is home to 114 regulated money-changing companies, which operate in 676 locations across the Emirates.
Godfrey Sullivan, a principal at Booz & Company who specialises in financial services, said such competition was forcing UAE money exchanges to offer additional services such as insurance.
"It's pretty intense competition," he said. "It becomes increasingly important to look for growth through other avenues."
Mr Sullivan said there was also competition from unregulated money-transfer operations, known as hawala, which are widespread in the UAE. Such operations are not included in the Central Bank figures.
However, Mr Sullivan forecasts "a gradual reduction in the size of hawala over time", prompting "positive growth" in regulated remittance firms in the UAE.
Additional competition is likely to come from telecommunications companies launching money-transfer services.
"There is interest from the telecoms providers as to how they can participate in the remittances market," said Mr Sullivan. "The ubiquity of the mobile phone is an opportunity. And that could be a potential source of competition."
Stuart Gissing, the regional director for the Middle East and North Africa region at the property firm Colliers International, said there was strong demand for retail space by UAE remittance firms.
"There remains healthy requests from exchange houses seeking suitable locations on the leasing market, so on that platform I would have to say their business is fairly robust," he said.