NBAD plans to be a wholesale bank globally

National Bank Abu Dhabi (NBAD), the country's largest bank by market value, has drawn up a strategic plan to become an international entity, in a move to protect and support UAE interests and back foreign companies doing businesses in the UAE and Mena region. The bank is also planning to enter China through its recently-opened branch in Hong Kong and establish a strong network in the Far East, as also the Indian market and operating as a local bank in each country in the Mena region.

In an interview with Emirates Business, Qamber Ali Al Mulla, Senior General Manager of the International Banking Division at NBAD, explains what is in the pipeline for the bank's international banking portfolio.


Can you elaborate on the bank's international portfolio?

Let me start with the bank's operation here. The bank has 95 branches in the UAE covering most cities. And we have a strategy to expand internationally. The reason for that is mainly diversification.

We have 45 branches and offices worldwide. They include 39 branches, one representative office, three cash offices and two subsidiaries. We have a big network in Egypt with 27 branches. We want to increase the number of branches in Egypt to 50 by 2014 and we also have a brokerage company there called Abu Dhabi Brokerage Egypt. The strategy basically is to stay at the top of the market. For example, in Egypt we deal with multinational companies and high net-worth individuals and high retail. This is the strategy we want to implement in the Arab World. We already have a branch in Kuwait and Bahrain each and a decent network in Oman. In Oman, we have seven branches and plan to increase that to 15 by 2014. We also have a representative office in Libya and the plan is to convert it into a branch.

We are opening a branch in Jordan in January or February 2010. We also have three branches in Sudan. We want to focus on Mena local markets.

Could you tell us more about the bank's operations in GCC?

In Kuwait, the central bank has given us the approval to open a branch, but they have not yet opened the market for us to expand. In Bahrain, we have a plan to further expand with one more branch opening in 2010. Qatar is in the pipeline. We applied for permission to open a branch four years ago and are still waiting for the approval.

What are your international expansion plans outside Mena?

We want to be an international bank. We are already in London and Paris with representative offices, and have a fully-owned subsidiary in the United States.

We also have a private banking office in Geneva to support our network in Europe and the US. The international strategy is that we want to be a wholesale bank and protect and support UAE interests, and support the interests of foreign companies doing businesses in the UAE and Mena region. We opened our Hong Kong branch on December 3. The Hong Kong idea was to help expand in the Far East, where we did not have a presence.

We have done a study to go to the Far East, because there is huge trade between the UAE and that region, particularly China. We had to study this very carefully, and Hong Kong was the ideal place to begin, since it is very close to the Chinese mainland. We have a good number of businesses that we have been channelling through foreign banks.

Now that will be channelled through our Hong Kong branch. Next, we will be going to China with a presence in Shanghai. We are also studying expansions in Malaysia, Singapore and Indonesia.

What about India, which is another big Asian market?

Yes. India is also in the pipeline. We have applied for going there in the past, but it has been delayed because India's central bank prefers a reciprocal arrangement. We will definitely go to India and it is part of our strategy.

We are already doing business with a large population of Indians here in the UAE. We are exploring setting up a representative office and will be applying for a licence in 2010.

In total, how many more new branches and offices will be added by the end of this year and in 2010?

From December 9 to 31, there will be no new branches or offices. But in 2010, we are opening 10 branches – five more in Egypt, three in Oman, one in Sudan and one in Jordan.

What is the international portfolio's contribution to the bank's balance sheet?

In terms of profitability as of September 2009, the net profit was Dh287.4 million, 11 per cent of NBAD's total of around Dh2.6 billion. In terms of revenues, it was Dh636m, 13 per cent of the bank's total of Dh4.8bn. Operational profit was Dh407.1m, 12 per cent of the total Dh3.43bn.

What is NBAD's international portfolio size in terms of number of assets and the combined value?

The combined value as of September 2009 was Dh48.1bn, accounting for up to 26 per cent of the NBAD's total of Dh185.6bn. The total net loans and advances stood at Dh25.327bn, 20 per cent of the bank's total of Dh128.2bn, while total deposits were Dh20.05bn, which comprised 18 per cent of the banks total.

What are the investment plans for international expansion in 2010?

Quality borrowers will for the time being defer their plans for expansion or new investments, which will cause a reduction in demand for funds. I believe the portfolio will register a marginal growth, as we are extremely careful in extending new advances.


PROFILE: Qamber Ali Al Mulla Senior General Manager, International Banking Division at NBAD

Al Mulla's career with NBAD spans a period of more than 25 years. He has held various positions in the Northern Emirates and Abu Dhabi, and was made Deputy Head of International Banking in 1996 and went on to become the head of the division in 1998.

Al Mulla holds a Master's degree in Business Administration.

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