The UK’s fourth largest lender was awarded its licence by the UAE Central Bank in 1977. It has one branch in Jumeirah which acts as its GCC regional hub plus four customer service centres at Arabian Ranches, Healthcare City, the Green Community and in Uptown Mirdiff.
“We would love to have more branches, especially in Abu Dhabi, and are currently talking to the Central Bank,” Bert De Ruiter, Managing Director of Lloyds TSB Middle East, told
Emirates Business.
“We have asked the Central Bank to consider issuing a full banking licence. I would be really pleased if we would get the licence in the second half of the year.”
Asked whether this target was realistic, De Ruiter said: “I think there is a willingness to consider. There are pros and cons in granting international banks more licences. Under the Central Bank regulations you are not allowed to open more branches unless you get permission so it’s not really in my hands.”
The UAE banking sector consists of 21 national and 27 foreign banks. National banks account for 77.4 per cent of the total assets as they have access to surplus the governments funds and have no restrictions on their branch networks. Foreign banks, on the other hand, face restrictions on the number of branches they open. Despite this they are increasingly concentrating on corporate lending, especially for big-ticket projects.
The aggregate assets of foreign banks increased by 30.4 per cent and those of local banks by 22.1 per cent during 2007, according to a study by Abu Dhabi-based investment bank the National Investor. The UAE has been under pressure from the World Trade Organisation to open up its banking sector to foreign competition. The probability of this happening any time soon, however, seems unlikely, adds the report.
Meanwhile Lloyds TSB is focusing on boosting profits from its current operations in the Middle East. The bank, which has repeatedly won awards from Dubai-based Ethos Consultancy for its excellent customer service practices, recorded a 70 per cent increase in profits last year.
De Ruiter said he was expecting a minimum 50 per cent growth this year.
“But I would not be surprised if we have the same percentage growth as last year,” he added. “Our growth has been phenomenal – if you compare our 2004 results with 2007 we are now seven times bigger. The next step is how we are going to consolidate.”
De Ruiter said the bank was considering transferring its Jumeirah branch to a larger site and establishing a presence in other GCC countries. “Lloyds TSB is a large group with a UK focus. But we are open to international expansion and the Middle East is one of the markets we are looking at.”