The UAE has all the elements needed to make it the financial and commercial hub of the region, according to a top international banker.
A dynamic private sector, a vibrant and growing capital market, and economic and political stability all combine to create exciting prospects for the future, said Michael Ladenburg, recently appointed head of corporate banking at the National Bank of Abu Dhabi.
Ladenburg has joined NBAD after more than 30 years’ experience at leading international banks such as Schroders and Robert Fleming, having held directorships in London, New York, Rio de Janeiro, and Tokyo. He was also Head of Corporate Finance at Saudi International Bank, leaving there shortly before it was acquired by GIB.
“A key ingredient for the future development of the UAE is the relative strength of the banking system, and when I was offered the opportunity to be a part of that I did not hesitate for a moment,” he said.
“This is clearly a very competitive market, in which local and foreign banks are competing strongly. There is probably more banking capital dedicated to this market than it needs for the foreseeable future, particularly taking into account the current oil price level in the context of the demand for credit locally.”
As the GCC moves towards a single capital market, Ladenburg sees the UAE becoming the undisputed financial hub of the region – boosted by the scale and complexity of local projects in the oil and gas and infrastructure sectors, largely financed by local banks using sophisticated financial techniques.
“There is little need for new products in a market so well connected with the outside world,” he says. “However, there may be specific opportunities for NBAD in the field of leasing, where we may introduce structures to assist local companies to increase their sales of high value consumer goods.
“I believe that there is also an opportunity as one of the largest banks in this market to provide a lead in the development of the capital markets in general and the stock market in particular. Government moves towards involving private finance in the power and water sector have given rise to sophisticated finance structures in which the local banks have played an important part. ”
He identifies inward foreign investment as an important part of the bank’s strategic objectives, demonstrated by its commitment to supporting a number of important foreign companies in their bids for important projects, as well as arranging and providing loan facilities when their bids are successful.
“We also have partnership arrangements with an Italian and a Japanese bank, which involves locating a representative in our offices here, in order to enable us jointly to identify and service trade and investment flows and we would welcome more of these arrangements,” he says.
Ladenburg predicts that new cash inflows into the region as a result of higher oil prices will undoubtedly attract a number of foreign banks to enter the UAE market – or in some cases to re-enter.
“Many of these will be focused on servicing outflows of investment by wealthy local people, but some will also seek to become involved in local projects and corporate business,” he says.
“We will be happy to see them bring money and expertise to help develop the local market, as we are here to stay and in the longer term will benefit from being part of a larger market which is sophisticated enough to compete on the international stage.
“Corporate bankers will tend to follow their clients, so as the region becomes widely seen as a favoured area for industrial investment there will certainly be more international activity. We at NBAD will benefit from this, not only because of our competitive position in, and knowledge of, this market, but also because we will be willing to work alongside these banks to meet more completely the needs of those companies operating directly in this market and the region.”
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