ATM growth halves in GCC as sector slows expansion

ATMs in the UAE increased by 27 per cent from 2,420 at the end of 2008 to 3,075 by the end of September 2009. (EB FILE)

The growth in the number of automated teller machines (ATMs) has more than halved in the GCC as the region's banking sector slowed down its expansion plans.

Saudi Arabia has seen at least a 50 per cent drop despite the massive government stimulus for the banking sector, US-based Diebold, which claims 65 per cent market share in the kingdom, said.

"Usually we deliver 1,500 ATMs to Saudi every year. But in 2009, the whole market from all manufacturers in 2009 has progressed by 800 only. In the UAE and other GCC states, it was reduced by at least 50 per cent, as well," said Habib Abinader, General Manager, Middle East and Pakistan, Diebold, told Emirates Business.

A double-digit growth has nevertheless been recorded in 2009 as the UAE and Saudi, the two largest banking economies in the Gulf, saw the number of ATMs up by 27 and 28 per cent, respectively. ATMs in the UAE increased by 27 per cent from 2,420 at the end of 2008 to 3,075 by the end of September 2009, figures from the UAE Central Bank show. Saudi on the other hand is estimated to have seen a 28 per cent increase from 2,893 in 2008 to about 3,700 in 2009.

These growths, however, were substantially lesser that the rates seen in the previous years, a period when the economic cycle was at its peak.

"We have not seen GCC increase its spending at all in 2009. The GCC spendign was down," said Dave Wetzel, Vice-President and Managing Director, Europe, Middle East and Africa, Diebold.

"In Emea as a whole, we have some markets that excelled and some that were hit. I had good markets in France, Belgium, South Africa but Russia hit us very hard because of the Russian economy and the devaluation of the rubble," he said.

ATM sales, however, are expected to pick up beginning this year. As per industry estimates, the number of ATM units expected to grow by 75 per cent over the next four years from the current 40,000 to 70,000 by 2013.

"There is a huge growth potential here," Wetzel said. "The biggest driver is the saturation factor. The Middle East, Eastern Europe and Africa still have a relatively low number of ATMs per million inhabitants."

Sales of major ATM manufacturers have dropped in 2009. As per Diebold's third- quarter results, its total product and services orders for financial self-service and security were down in the low 20 per cent range compared to the same period in the previous year. Global financial self-service orders also decreased in the low 20 per cent range. Orders in Emea decreased more than 40 per cent while orders in Asia Pacific decreased in the low double digits.

NCR, its fiercest rival, has also reported lower figures. In the Emea, NCR's revenue declined by 22 percent due to lower product sales to customers in financial services across the region.

Product sales to the retail and hospitality industries also declined in Emea. Revenues fell 10 per cent in the Asia-Pacific/Japan region, due primarily to lower sales in the financial services industry.

"We did see different things in regards to the crisis," said Wetzel. "Some financial institutions saw it as a time to re-evaluate and took the time to invest, make them stronger in the long run while some put a hold on the capital spending in branches. There are still some unknowns to 2010 but our projections for Mena is that there will be significant growth," he said.

 

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