NBAD Targets New Markets

The National Bank of Abu Dhabi , or NBAD , will continue to focus on organic growth to expand its operations in the regional and international markets, a senior official said.

The bank, which currently operates in 13 countries on four continents, is on track to make forays into Lebanon, Iraq, South Sudan and India in the near future, while other markets like Morocco, Tunisia and Algeria are under study.

“The bank has further expansion plans including in the GCC, like Qatar. We are also strategically expanding our branch network in its existing countries like Oman, Jordan, Egypt and Sudan,” Abdulla Mohammed Saleh AbdulRaheem, deputy group chief executive of NBAD , told Khaleej Times in an interview.

NBAD , which is rated as one of the top 50 safest banks in the world, was incorporated in 1968 and is listed on the Abu Dhabi Securities Exchange. It has a network of 123 branches and more than 550 ATMs to provide banking services to customers all over the UAE.

Saleh AbdulRaheem said NBAD believes in organic growth, particularly by entering new markets both in the region and beyond. “We have submitted an application to establish a presence in India. Over the long term, launching a branch in Toronto is part of the NBAD plan,” he said.

NBAD has nearly 50 branches and 60 ATMs outside the UAE. Its overseas network stretches from Oman, Kuwait and Bahrain in the GCC; Egypt, Libya and Sudan in Africa; UK, France and Switzerland in Europe; Hong Kong, Shanghai, Malaysia and Jordan in Asia to Washington, DC in the United States.

“This year, NBAD inaugurated its Shanghai Representative Office and the National Bank of Abu Dhabi Malaysia Berhad in Kuala Lumpur. We have ambitious plans to set up representation in various key financial centres worldwide to offer our clients a truly global service,” he said.

Domestic market

Saleh AbdulRaheem said the bank will also strengthen its position in domestic market by opening 10 more branches in the country.

“We will continue to develop retail banking products and expand the branches and ATM network to increase our client base. “Specifically, the bank is expanding the network in Dubai and the Northern Emirates. It is also launching Business Banking Centres that exclusively serve small and medium enterprises.”

To a question about the prospects of Islamic banking, he said it continues to be an underserved market and the NBAD will keep on developing innovative and customer-centric products to tap this segment.

About the recent rules announced by the UAE Central Bank to improve liquid assets of banks, he said the new guidelines will ensure domestic banks to improve liquidity management in line with best international practice.

” NBAD has been running in-house Basel III liquidity reports for around a year and therefore, it has a well thought-out strategy in terms of compliance. We are already compliant with two initial central bank guidelines being implemented being during 2013,” he said.

Banking outlook

Saleh AbdulRaheem said the banking sector still has challenges ahead, but economic growth is on the right track going into the second half of the year. At the global macro level, he said more stability is needed to keep oil prices at elevated levels and to bring back needed business confidence.

“There are some signs of stabilization on the provisioning side, but still more to go. Government spending needs to pick up further as it is one of the key forces behind loan growth. We expect loan growth to gradually pick up in the beginning of next year.”

About the bank’s profit and revenue growth in 2012, he said its balance sheet growth is driven by lending, which is expected to grow by 10 per cent, while top-line growth will be driven by interest and fees with five to 10 per cent increase this year.

“We expect growth in deposits and assets to continue and that for the full year of 2012, balance sheet growth will be driven by lending, which we expect to grow approximately 10 per cent.” To a question about lower impairment charges (13 per cent) and higher operating expense (3.7 per cent) in the first half and its impact on the bank’s profits in the second half, he said: “We do not anticipate these first half items having an impact on our profitability in the second half.”

In reply to a question regarding any significant impact of the recession on the bank, he said NBAD ‘s vigorous risk strategies and systems in place have largely shielded the group from regional and global uncertainties.

“Since the beginning of the recession three years ago, NBAD has been included in the list of the World’s 50 Safest Banks by Global Finance and has every year improved its position in the list, from 50th to 46th to 32nd in the latest ranking. This was, of course, the result of the bank’s effective risk strategies. So, while the global recession slowed the bank’s growth, it has brought to light its competent and dynamic management, which in turn serves as an asset to expand our global reach.”

About the bank’s Emiratisation policy, he said NBAD continues to add to its innovative programmes that help it to recruit, train and retain top UAE national talents. This year we launched the Tomouh programme, under which NBAD recruits young people and offers them full scholarship and stipend for education abroad.

“This year, we have four Emiratis studying in America and Europe. This is in addition to our Afaq and other recruitment and education programmes, as well as others. NBAD ‘s Emiratisation is guided by the Bank’s learning culture, which is served by our education centres, in Abu Dhabi and our recently launched NBAD Academy in Dubai,” he concluded.

Khaleej Times