Mashreq Bank set for branchless future

dubai - The bank will soon provide all regular banking services through digital channels

Mashreq Bank said on Wednesday it plans to launch this year a digital banking platform to provide all regular banking services as it marks its 50th anniversary.

Unveiling the digital roadmap of the oldest privately owned bank in the UAE, Abdul Aziz Al Ghurair, CEO of the lender, said the underlying strategy is to continue to digitise the bank, make customer experience seamless, personalised and omni-channel and lead into the future where banking goes entirely branchless.

The bank will continue to innovate to deliver on this promise, he added. "Innovation has been deeply embedded in the DNA of Mashreq throughout the last 50 years, and it will continue to be core to our strategy moving forward."

He said with 85 per cent of Mashreq's transactions happening digitally, it is critical that the lender continues to develop new, innovative products and services for customers that cater to the growing trend.

Al Ghurair expects the bank to provide all regular banking services through digital channels to raise online transactions to 97 per cent. "Soon after Ramadan, we will invite you to join us again, where we will tell you more about what we plan to do."

Disruptive technologies
Al Ghurair, who is chairman of the UAE Banks Federation, a professional body representing 49 member banks operating in the country, said disruptive technologies, including blockchain, artificial intelligence, robotics, intelligent data mining and analytics, would lead to systemic changes within the banking industry in the next five years.

"From a single line of business in 1970s, today we offer a full spectrum of services across retail, corporate, investment and international banking.
From one branch in Deira, today we have over 70 branches across 12 countries, and are present in key financial and business hubs of the world such as New York, London, Mumbai and Hong Kong," Al Ghurair said.

The bank's retail business leads the market with innovative use of technologies, serving over 500,000 customers and the second largest merchant network of 13,000 locations. Total assets has grown from a modest Dh2 billion in the late 1970s to Dh122 billion in 2016, he said.

"We are the only bank in the UAE whose shareholders' equity grew from the initial Dh6 million in 1967 to Dh19 billion today, where the entire growth over 50 years has been funded organically without ever raising fresh capital," Al Ghurair said.

He said Mashreq Bank, originally called Bank of Oman, has remained profitable every year in the last 50 years, despite economic turbulences. Today, it ranks among the top banks in the UAE and is ranked number 25 on the Forbes Top 100 Arab Companies 2016 list.

Mashreq Bank has remained dedicated to the development of Emirati talent. "The number of UAE nationals who have joined the bank in the past five years has grown exponentially. This is an example of the bank's commitment to supporting the UAE's vision to grow future leaders," he said.

Corporates drive growth
Mashreq Bank expects net profit growth of around five per cent in 2017, towards the top end of growth for the UAE banking sector, driven by expansion in the corporate sector. Growth in the retail sector would be more sluggish as the impact of the new credit bureau made Mashreq and other banks more cautious about lending, said Al Ghurair.

"UAE growth will come from corporates," he told reporters on Wednesday. "The good news is that for the large corporates there's no stress so they're still performing and the SME issue has stabilised and the credit card business is stable."

Growth for the overall banking sector would be around three to fve per cent, he said.

Mashreq last month reported a 2.7 per cent rise in first-quarter net profit to Dh546 million as impairment charges dropped by 15 percent. Levels of provisions for bad debt across the banking sector should improve in 2017, said Al Ghurair.

In the retail sector, Mashreq had increased its rejection of credit applications by around 35 per cent since it began using the Al Etihad Credit Bureau data last year, he said.

- issacjohn@khaleejtimes.com
With inputs from Reuters