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Banks to post 45pc profits surge in 2008

DUBAI - The UAE banking sector - the Middle East's largest in terms of total assets - is on course to post 30 to 45 per cent profit growth in 2008, stronger than its performance in 2007, a top banking official said yesterday.

In the first half of this year, the sector's profit is estimated to be between 30 and 45 per cent. "Based on this trend, which is expected to be sustained for the whole year, we expect this year's performance to be stronger than last year," said Ahmed Humaid Al Tayer, Chairman of Emirates NBD, the largest bank in the Middle East in terms of assets valued at Dh253 billion.

In 2007, the UAE's banking industry - with total assets of $336 billion -recorded a profit surge of 25 per cent to to Dh24.8 billion compared with Dh19.4 billion in 2006.

Speaking on the sidelines of a media briefing to announce the integration of Emirates NBD's Large Corporate Clients' accounts under the umbrella of the Large Corporate Unit (LCU), Al Tayer said he was upbeat about the outlook for the industry.

According to the UAE Central Bank, the banking sector has seen a strong performance in 2007, as total deposits grew by 21.5 per cent to Dh675 billion from Dh555 billion, assets and liabilities jumped 23 per cent to Dh1.55 trillion from Dh852 billion, while loans and advances increased by 21 per cent to Dh630 billion from Dh520 billion.

Al Tayer said the integration process of Emirates Bank Group and National Bank of Dubai would be completed in the first quarter of 2009 when both banks would migrate to a new core banking system. He said the launch of LCU marked one of the most important integration milestones and reflects the steady progress of unifying businesses at the group.

The unit will manage the large corporate accounts at Emirates NBD worth more than Dh130 billion - which accounts for 40 per cent the merged entity's assets. "Relationship managers have been appointed to manage accounts of each company and understand their requirements so as to provide services and products tailored to their corporate needs."

Abdul Wahid Al Fahim, General Manager, Wholesale Banking, Emirates NBD said the new unit will enhance the Group's capability to compete with international players. Mahdi Kazim, General Manager of the LCU, Emirates NBD said after integrating the large corporate accounts, we are currently consulting with our customers on unifying the procedures of granting credit facilities for all our large corporate clients to enable our customers to bank with us through one account.”