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banking and finance


h.e. Abdul Aziz Al Ghurair, chairman, Mashreq


2


011 has been quite an eventful year for the global economy, but the UAE has weathered the turbulence


well and largely remained insulated from the impact of the Eurozone crisis. The UAE financial services industry, being the barometer of the overall economic climate of the country, reflected this stability, which is evident from the reasonably good performance posted by UAE banks for the first nine months of the year. However, during 2011 there was a


visible shift in the thinking and strategy of most UAE banks. Having overcome the impact of the 2008 financial crisis, banks in the UAE have shifted their focus internally and have been working to strengthen their systems, processes, structure and risk management policies. Banks are, in general, looking internally for improvement opportunities. Most of them are revisiting and re-shaping their medium to long-term strategies, revamping their distribution strategies and identifying areas for future growth. In short, they are spending time and efforts to build strong fundamentals to face the new economic reality. The after effects of the economic


upheaval witnessed in 2011 in the Western economies will impact the fast growing economies of Asia, which are expected to slow down in 2012. This will affect the UAE and I expect flat performance or marginal growth for the UAE banking sector in 2012.


Customers will be more demanding and banks will be under competitive pressure. Margins will compress, customers will demand flexibility, and won't accept a ‘one size fits all’ approach. Banks will be expected to come up with innovative solutions to meet customer demands. To be able to compete effectively in a market, where growth is flat and customers are


“The after effects of the economic upheaval witnessed in 2011 will affect the UAE, with flat performance or marginal growth for the UAE banking sector in 2012.”


demanding, banks will need reorganise themselves in line with the needs of their customers. Quality customer service will be the major differentiating factor. Since the financial crisis of 2008,


the global regulatory environment has changed forever and this will ensure that banks behave more responsibly. Risk management will take precedence over profitability and considerations. Liquidity and capital management will be the first priority for banks. Finally, let me add that changes in


the banking regulations and fiscal discipline, introduced during the last two years, will make the UAE banking sector stronger and will foster long-term growth in the country.


GULF BUSINESS / 51 fast facts


- mashreq is the second oldest bank in the uae (after dubai islamic Bank), with total assets of dhs70.9 billion and net profits of dhs756 million in the first nine months of 2011. the bank is listed on the dubai Financial market.


- mashreq introduced the first atms and credit cards to the uae.


- the bank opened its 54th branch in umm suqeim, dubai, this year, which includes a mashreq Gold centre.


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