Emirates Islamic Bank to expand branches in UAE
After recording a strong growth in first quarter net profit and net income, Emirates Islamic Bank is gearing up towards an aggressive push in the competitive retail, small and medium business and priority and private banking segments while opening about 10 to 12 new branches this year.
With the new additions, the bank will have a total count of about 58 to 60 branches, with two each in Abu Dhabi and Sharjah and the rest in Dubai. After the full integration, UAE’s third largest Sharia compliant bank closed five branches of Dubai Bank, mostly for reasons of proximity to EIB. The bank reported a 101 per cent growth in net profit in the first quarter compared to the same period last year.
The challenges ahead are varied.
Even though EIB is in the top two or three in vehicle financing, the rates at 2.5 per cent is extremely low, making it highly competitive, pointed out Faisal Aqil, deputy CEO, consumer and wealth management at EIB.
In the credit card segment, it has hardly a presence. “The focus was not there plus for an Islamic bank, it is difficult to promote the mechanism of a credit card,” he said, adding that there will be an increasing focus on this segment from now onwards.
“Retail is the challenge with all the big players coming in,” he said.
In retail, the bank is trying to increase its book by around 35 per cent and in priority and private banking to double the existing book. On large corporates it prefers to stay at their current position.
Given that banks in the UAE were badly burnt by their overexposure to real estate during the financial crisis, EIB’s cap towards real estate (this is excluding mortgages) is down to 20 per cent from 40 per cent in 2008.
According to Aqil, the bank has allocated 10 per cent of asset base as a cap for SME.
“We are developed policies, procedures, we have started recruiting the team and by this month we will be ready with the teams,” he added. “By July we will see some of our [SME] activities in the market.”
The growth for deposits this year is expected to be about 25 per cent even amid low interest rates of about one and one and-a-half per cent for one year deposits.
- Oman’s Duqm tourist complex moves forward with government approval
- Kuwait fights budget deficit: Reexamining government salaries, expatriate labor
- Tunisian Confederation of Industry, Trade, and Handicrafts fights nationwide unemployment levels
- Construction costs fall in Dubai
- Western tourists flock to Iran, could generate $30B in new revenue
- Emirates Islamic Bank Relocates its Al Ain Branch to Expanded Services
- Agreement to better military supply in Bahrain signed
- Emirates Islamic Bank highlights ongoing integration of Dubai Bank Operations and Branches
- EIB Stakes Out ‘Banking in Three Dimensions’ Position
- Emirates Islamic Bank continues its ambitions expansion