One of the leading Abu-Dhabi-based banks, National Bank of Abu Dhabi (NBAD) has announced it will open 28 branches across the UAE this year.
The bank believes there is a “huge potential for retail banking as the UAE is growing rapidly”.
John Malouf, Head of Retail Banking at NBAD spoke to Emirates Business about the bank’s strategy and innovative products and services to cater to most segments of the market and provide what he calls “Convenience in Banking”.
“Increasing wealth in the region is also driving demand for property, motor vehicles and other consumer goods. Wealth Management products and innovative deposits are growing as a result,” Malouf said.
He revealed that NBAD will come out with several retail banking initiatives during the course of the year and will concentrate especially on the e-Banking segment.
He believes that NBAD remains well placed to take advantage of the huge growth opportunities in Abu Dhabi and the region, and play a significant role in the economic development of the UAE.
Can you tell us about your performance and profit in 2007?
NBAD achieved a net profit of Dh2.5bn in 2007, compared to Dh2.1bn for 2006, a 19 per cent increase. Net profit from the domestic banking business, which we are part of, increased 19 per cent to Dh1,454m in 2007, which formed 58 per cent of the group’s profits. NBAD continued to grow its domestic operations and during the year, nine more branches were opened taking the total number of branches to 76 spread over all seven emirates. A Small and Medium Size (SME) unit was added to the existing retail, corporate, elite and leasing business.
Was 2007 the best year ever for NBAD?
Since 1999 there has been remarkable progress on a yearly basis. Since the first five-year strategy plan was introduced, NBAD’s profit have increased from Dh300m in 1999 to Dh2.5bn in 2007, with a compounded average growth rate of 30 per cent since 1999.
The bank has progressed across a broad front, investing in its franchises, its people and its systems, and we remain well placed to take advantage of the huge growth opportunities in Abu Dhabi and the region, and play a significant part in the economic development of the UAE. Our performance in 2007 is a continuation of this progress as a result of NBAD’s strategic plans.
The growth of active internet banking users was 30 per cent. Our Internet Banking Unit (IBU) is one of the most popular in the UAE. In fact it is the only ISO Certified IBU in the country. Also, NBAD now has an international presence in Bahrain, Kuwait, Oman, Egypt (where we have the largest foreign bank network), Sudan, France, the United Kingdom, the United States and Switzerland.
With rising consumerism, is the ratio of retail lending seeing a rapid increase in the UAE?
The latest studies by international firms have shown that although the UAE has more than 50 operating banks, there is still a huge potential for retail banking.
Increasing wealth in the region is also driving demand for property, motor vehicles and other consumer goods. Wealth Management products and innovative deposits are also growing as a result. Abu Dhabi is seeing very impressive growth driven by property and infrastructure development
How much of your bank’s portfolio is run by retail businesses now?
For NBAD, the retail business represents around 20 per cent of assets in loans and advances and about 30 per cent of liabilities in terms of deposits.
What are NBAD’s plans for 2008?
This year will be a busy one for us. We plan to expand the network of our branches by opening 28 more, which will mean a growth rate of 37 per cent.
We also plan to increase the number of our ATMs across the country to more than 250. We will also focus more on Remote Delivery Channels and Electronic Banking Solutions.
NBAD is also gearing up to launch “Payment Gateway”, which will offer web-based payment solution that can be integrated to a client’s website. We will also automate payments/fund transfer solutions and ease bulk payments for construction companies and developers.
Also, we will introduce Contactless Card Payment – a solution for instant payments without the need to swipe a card. Our products will be tailored to cover all segments of the market.
For corporations and their employees we will introduce the Low Salary Payroll Card or Ratibi, an innovative pre-paid card designed to replace the payment of wages through cheques and cash.
It is an efficient way for corporations to manage their payroll processing accounts. In addition, it gives employees the flexibility of making cash withdrawals and other banking transactions via worldwide ATMs and it can also be used as a Debit Card for purchases on Points of Sale machines.
Why have you shifted focus to retail banking?
NBAD is a strong bank in both the corporate and retail segments. We were originally a corporate bank but we have long had a strong retail base, which has a significant share in NBAD’s overall portfolio. We have an impressive range of products and services and our extensive distribution, both physical and electronic, gives our customers choice in banking.
NBAD has started an aggressive marketing campaign. Is it part of a paradigm shift?
No, the strategy is consistent. As part of that strategy, we want to let the market know what great products and services we are offering in a transparent way.
What is happening in product innovation and where are banks mostly competing to get customers on board?
NBAD’s strategy is to introduce innovative products and services to cater to most segments of the market and provide “Convenience in Banking”. We believe our products and services, such as our Personal Loan at 7.77 per cent reducible, are among the most competitive in the market. We don’t want to compete on the basis of price alone and we also don’t want to compete by lowering our credit standards.
Head of Retail Banking, NBAD
Malouf’s career has spanned more than 30 years in banking and financial services throughout the world, including Australia, New Zealand, Asia and now the Middle East where he is with NBAD.
John’s career has been a varied one. He started his professional life as a mechanical engineer in the power industry in Australia and then moved to Citicorp Australia Ltd after he obtained his MBA.
He was MD and CEO of AGC Ltd in Australia. He was also a member of the Management Council of Westpac Banking Corporation, a major Australian bank.
He currently lives in Abu Dhabi where he has been since October, 2007. He has a wife and three grown children and his hometown is Sydney, Australia.
NBAD aims for 37% growth rate in 2008