UAE’s NBF Bank Expects Loan Growth This Year
The NBF bank is expecting to see a double-digit growth in loans this year, the CEO said
National Bank of Fujairah (NBF) expects to outperform its rivals with double-digit loan growth in Y 2015 as buoyant demand in sectors such as trade finance, services, manufacturing and education offset slight softness in the infrastructure market, its CEO said Tuesday.
NBF is one of the smaller players in a crowded United Arab Emirates (UAE) banking sector, which CEO Vince Cook said allows it to be more selective on business sectors than some of its larger rivals.
“General expectation for the market is generally sort of high single digits, maybe low double digit loan growth. We will do better than that,” he told reporters.
There are 51 banks in the UAE, which has a population of roughly 8-M.
“We’re not in the top 10, so we can be very selective about what business we do but be very meaningful in those segments. So our business is targeted at certain customer groups and we make sure we are the bank to go to for those groups.”
NBF’s balance sheet and revenue growth so far this year is at a percentage in the high teens, Mr. Cook said.
Between 50 and 60% of the bank’s business is in Dubai, where the market is very strong, he said, adding that it is also performing well in Fujairah and Abu Dhabi, which account for much of the bank’s remaining business.
Mr. Cook said that growth has been particularly buoyant in trade finance, though volumes of new business in the infrastructure sector were less encouraging.
“There’s a sort of wait and see while Oil prices, Dollar and currency rates stabilize a little bit. We are not seeing a dramatic shift one way or another,” he said.
Crude Oil prices have recovered after slumping close to a 6-yr low of 45 bbl in January. The USD has weakened after .DXY surged nearly 9% in Q-1 of this year on the notion that the Fed would raise interest rates soon. The UAE Dirham is pegged to the USD.
Mr. Cook said that NBF had not been hit by swings in the real estate market because it is not a big player in that sector.
Dubai residential property prices are expected to fall by 10-20% this year because of subdued demand, slower economic activity and downbeat investor sentiment, credit ratings agency Standard & Poor’s said Monday.
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Paul Ebeling
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