ENBD ex­pects re­tail lend­ing growth to fall

Kuwait Times - - BUSINESS -

DUBAI:

Emi­rates NBD (ENBD), Dubai’s largest bank, ex­pects loan growth within its re­tail business to halve next year to around 5 per­cent as the mar­ket slows, its re­tail and wealth man­age­ment head said yes­ter­day. The bank’s con­sumer lend­ing book has grown by 10 per­cent since the end of 2015. ENBD is aim­ing for full-year loan growth of mid to high sin­gle dig­its next year across the bank. “Sin­gle digit for next year is what most in the in­dus­try ex­pects and I ex­pect us to lead the in­dus­try and I hope we will con­tinue to gain mar­ket share,” Suvo Sarkar, se­nior ex­ec­u­tive vice pres­i­dent and group head of re­tail bank­ing and wealth man­age­ment at Emi­rates NBD, said in an in­ter­view.

“That’s pleas­ing for us in a sit­u­a­tion of a rel­a­tively slow mar­ket.” Banks in the United Arab Emi­rates have been hit by tougher op­er­at­ing con­di­tions fol­low­ing the col­lapse in oil prices that has fed through into higher lev­els of bad loans and also a squeeze on net in­ter­est mar­gins.

Speak­ing dur­ing the bank’s third-quar­ter re­sults call, ENBD group chief ex­ec­u­tive Shayne Nelson said the bank was see­ing a higher in­ci­dence of im­pair­ment charges in its mi­cro- small- and medium-sized business and re­tail di­vi­sions. Sarkar said he did not ex­pect a fur­ther rise in im­pair­ments within the SME sec­tor. “There will be an­other 12 months of a dif­fi­cult sit­u­a­tion for the SME sec­tor. There’s some pain to go but the worst is over.”

He said data from the UAE’s fed­eral credit bureau, set up last year, had helped the bank to nav­i­gate the un­cer­tain econ­omy. Since launch­ing in Novem­ber 2014, Al Eti­had Credit Bureau has al­lowed banks to ac­cess data on con­sumers at other fi­nan­cial in­sti­tu­tions when mak­ing lend­ing de­ci­sions, giv­ing banks a clearer pic­ture of the level of in­debt­ed­ness and fi­nan­cial his­tory of bor­row­ers.

“For the new business we’ve booked in the past four quarters, we’ve seen far bet­ter delin­quency be­hav­iour,” he said. Sarkar also said that mak­ing use of the in­for­ma­tion was also a rea­son for the lower new lend­ing growth rates. Within the re­tail seg­ment, the bank’s ap­proval rates on new business had dropped off by 10 to 15 per­cent, he said. —Reuters

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