x Abu Dhabi, UAEMonday 24 July 2017

United Arab Bank set to go against the grain with expansion

United Arab Bank stakes its claim to Abu Dhabi, as the Sharjah-based bank announces new branch openings and efforts to reconnect with Emirati clients - with video.

Paul Trowbridge, the chief executive of United Arab Bank, says the bank will renew its focus on Emirati clients. Pawel Dwulit / The National
Paul Trowbridge, the chief executive of United Arab Bank, says the bank will renew its focus on Emirati clients. Pawel Dwulit / The National

United Arab Bank (UAB) plans to boost both its Abu Dhabi branch network and the number of its Emirati customers.

UAB's optimism contrasts with the action of larger rivals that are scaling down operations in the UAE. HSBC, Barclays Bank and Shuaa Capital have all reduced staff numbers in the Emirates in the past month.

The bank, based in Sharjah, will open four branches this year, taking its total to 17 across the UAE. Three will be in Abu Dhabi, with the fourth in Dubai.

"United Arab Bank is in a period of expansion," said Paul Trowbridge, the bank's chief executive. "We've been a net employer and not one of the banks which has reduced its headcount."

The bank will renew its focus on Emirati clients, having previously sought to target western expatriates. "It's proudly an Arab bank and a bank of the UAE," Mr Trowbridge said, adding that the bank would also target expatriates who are looking to stay in the country for many years.

"Our physical footprint hasn't always matched the needs of our customers," he said, explaining the increased number of branches planned for Abu Dhabi.

The new branches would help the bank expand its business in retail banking, which it recently established, Mr Trowbridge said. "Our retail banking book is growing handsomely. The corporate and commercial part of the book is consistent with the profile of the economy."

He said the bank's alliance with Commercial Bank of Qatar, which holds a 40 per cent stake in UAB, and National Bank of Oman, would help it target development projects across the Gulf as Qatar prepared to host the 2022 Fifa World Cup.

Mr Trowbridge said he expected Qatar to experience a "decade-long period of growth, through its own natural resources and [the] 2022 [tournament]. We'd hope to be part of that as a regional success story."

The bank has signed Fabio Cannavaro, the captain of the 2006 Italian World Cup winning football team, to serve as a "brand ambassador" for the bank.

Net profits at UAB fell 6.97 per cent during the first quarter of this year to Dh60.9 million (US$16.5m) from the same period last year.

The bank's retail business accounted for profits of Dh7.7m in the first quarter, an increase of some 28 times from the year-earlier quarter. Mr Trowbridge said the majority of the bank's income in this segment did not come from fees and would not be significantly affected by the Central Bank's recent regulations on retail lending.

Analysts said some smaller banks may be seeing greater flexibility to increase business than larger rivals, which have seen their ability to grow hobbled by exposure to troubled corporate entities.

"Banks that have relatively smaller problem issues could have the ability to focus attention on growing their business rather than legacy issues," said Murad Ansari, a financial analyst at EFG-Hermes.

New Central Bank limits on personal lending may also give opportunities to smaller lenders in that industry, he said.

The new regulations "could open up the field for smaller players to come in and pick up some of the assets from the larger banks".