Established in 2007 as the first consumer finance company from Dubai Holding, Dubai First is striving to live up to its promise of delivering "first" experiences for its customers. The company has launched several innovative products such as the Dubai First MasterCard with up to four per cent cash back, the highest in the region; the Business Credit Card for small and medium enterprises; Corporate Card for large corporations; and the award-winning Royale MasterCard for ultra-high net worth individuals. In a time when the credit crunch is forcing companies to scale back, Dubai First is looking forward to the future. The company has just completed a successful second year in operation that saw its revenue growth more than double and its issuance rise to 166,000 credit cards. Emirates Business caught up with Ibrahim Al Ansari, CEO of Dubai First to discuss, the financial services industry and Dubai First's plans for the future.
How would you describe 2008 in a nutshell?
Eventful. Last year was a good year for Dubai First as we met many of our targets, and even exceeded some others. When the company was formed two years ago, we said that we want to be the kind of business that puts customers first, whether it's through specialised products and services or through rewarding our customers for their loyalty. I think that we achieved these goals successfully in 2008, including winning awards for our work.
What were the specific business objectives of last year?
In year one of operations, we launched products that were geared at individual consumers. In year two, we shifted our focus slightly to the B2B sector, which has traditionally been an underserviced sector.
If you look around the credit card market, you will find that the product offerings are heavily skewed towards the consumer sector. However, small and large businesses have been largely ignored due to lack of understanding about what this sector needs. At Dubai First, we asked ourselves this very question: What does a business need? The answer was to not club all businesses in one category, but rather to develop a customised approach.
First we introduced the Dubai First Business Credit Card that catered to small and medium enterprises, giving them access to a card that helps their business grow. Second, we looked at mid to large corporations. These large companies wanted an effective management tool to control company and employee business expenses. The result was the Corporate Card. Both these products have been well-received in the market and we are seeing a healthy demand for them continue in 2009.
And what about the performance of your consumer card portfolio?
We have continued to build our consumer card portfolio as this represents a large segment of our business. Last year, we witnessed a great deal of interest in the cash-back credit cards. The classic and gold cash-back cards allow customers to earn cash back every time they make a purchase, which was incentive enough given that cost of living had risen considerably. At present cash-back cards account for approximately 30 per cent of all the cards we issue. This is a substantial share given that the product was only launched a year ago.
Since the onset of the credit crisis, many banks and finance companies have recorded drop in revenue, particularly in the fourth quarter. How has this crisis affected your business?
I can tell you that Dubai First is doing extremely well in the market, and we hope to continue doing so over the next 12 months. As you will see, the numbers speak for themselves. We have achieved our financial targets for 2008 and recorded Dh246 million in revenue, which is up 176 per cent from Dh89m in 2007. Our total credit card issuance is now at 166,000 compared to 78,000 in 2007.
No company is immune from the crisis, but we are confident that we will weather this storm.
What's the percentage of your current market share in the UAE?
We currently hold around five per cent of the total market for credit cards. This has largely been driven by our consumer card portfolio, followed by corporate cards. Given that some of the most long-established players hold around 10 to 12 per cent market share, we are doing quite well for a company that has only been around for two years. Our aim is to increase our market share gradually to achieve a leading position in the region.
You don't appear to have many branches in the UAE. Does this make it difficult for your customers to pay their bills on time or even get in touch with you?
Not at all. We have our main branch in Dubai and have recently opened a second branch in Abu Dhabi. However, our payment network covers more than 700 points that include the branch networks of Al Ansari Exchange, UAE Exchange, Al Fardan Exchange, Al Ghurair Exchange, Al Rostamani Exchange, Redha Al Ansari Exchange, Wall Street Exchange and select Enoc/Eppco service stations.
In addition to the payment network, our customer call centre is operational 24/7, even when calling from outside the UAE. Also, our Royale and corporate customers have dedicated relationship managers on call and ready to help.
What's next for Dubai First? Will we see new credit cards and products in 2009?
I think you're going to see a stronger Dubai First in 2009. We have spent the last two years building our credit card business, and that will continue to remain an integral part of our product portfolio.
However, we are also now exploring other innovative products that don't currently exist in the market. Our first new venture in 2009 is Corporate Fixed Deposits which is an ideal solution for companies looking for liquidity, above-market returns and the security associated with traditional fixed deposits.
Given the current market situation, this product will help companies manage both liquidity and day-to-day operations.
How do corporate deposits work and what benefit do they provide?
The Corporate Fixed Deposit works similar to traditional term deposit accounts. There is a minimum deposit requirement of Dh1m, and companies can either opt for a fixed-deposit term ranging from three to 12 months or choose a revolving maturity option. The rate of return offered on these deposits will depend on the length of time or terms, with longer terms generating higher rates of return. Companies that sign up for corporate deposits will benefit from one of the highest rates of return in the region, as well as access to ongoing liquidity and minimal charges if companies need to withdraw funds prior to the contractual deposit term date.
Finally, what's your outlook for the financial services sector in the UAE over the next 12 months?
I am optimistic. The need of the day is to infuse confidence in the financial services sector. There is a concerted effort being made by the authorities at home and abroad to develop workable solutions that will keep the banking system moving.
PROFILE: Ibrahim Al Ansari CEO of Dubai First
Since the company's inception in early 2007, Ansari has been tasked to lead a team that offers a pioneering range of innovative products and services in the areas of credit cards, mortgages, investment and wealth management.
Ibrahim brings extensive industry experience to his new role, with more than 10 years in the credit and consumer banking industry. He has worked with top conglomerates such as Citibank, Standard Chartered Bank and ABN Amro.