Banking & Business Review Nov 09

Vol. VI. No. 45 November 2009

Editor’s note Editor K Raveendran

ravi@sterlingp.ae

consulting Editor Matein Khalid

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Publisher & Managing Director Sankaranarayanan

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Director Finance Anandi Ramachandran

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GENERAL MANAGER Radhika Natu

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Editorial Staff Writer Ambily Vijaykumar

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Contributing Editors Anand Vardhan Linda Benbow Vanit Sethi Manju Ramanan

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DESIGN Ujwala Ranade

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Sales and Marketing Product Manager Vijayan G

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Account Manager Peter Macwan

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Rashmi Pai

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ACCOUNTS Biju varghese Circulation Supervisor

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Not bad at all

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s if the global financial crisis and the real estate bubble were not enough, the UAE banks have been dealt yet another blow, making the recovery process even more difficult. According to the latest assessment by the Central Bank, the UAE banks, both local and foreign included, have a combined exposure of $2.9 billion to Saudi Arabia’s troubled business groups of Saad and Algosaibi.

More than the amount involved, what makes the problem more biting is the fact that it has surfaced at a time when banks are already struggling to come out of a crisis of unprecedented proportions. The new burden has necessitated a significant increase in the level of provisioning, making the books of the banks to look further grim. The bad debts have surely affected the banks’ crisis management strategies.

Despite all these drawbacks, however, the UAE banks have held on to their task quite creditably.

According to the latest assessment, the combined profits of all banks in the country are expected to be around Dh20 billion for 2009, which is Dh6.8 billion lower than the previous year’s level.

That is, of course, a big drop. But considering the difficult conditions through which the banking industry has gone through in recent times, what the banks have managed to put together in terms of surplus is indeed remarkable. Let’s hope that there are no more shocks waiting to pounce on the hapless industry.

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K Raveendran

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CONTENTS

8 COVER STORY

Stuffing the rooms Hotels are going the extra mile to woo customers

Selling through the brand Rates do the talking Liquid rate is the new buzzword

4 SURVEYS 22 BANKS

33 REAL ESTATE

Grim numbers

Some light, finally

Bad debts eat into banking sector profitability

Confidence levels are increasing across region

27 Tryst with luxury

35 ISLAMIC FINANCE

Card companies target market’s upper end

Over $9 billion sukuk issues

29 Moment of truth

38 INTERNATIONAL

Banks are in a fight for their lives

Pendulum has swung

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November 2009

RAK Hospital, the 65 bedded multispeciality hospital in Ras Al Khaimah is the destination for premium healthcare & premium hospitality. The hospital provides top of the line diagnostics and treatment facilities led by a team of highly qualified doctors. The hospital is managed by Sonnenhof Swiss Health.

SURV E YS & FINDINGS

70% of Dubai residents yet to ride Metro

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YouGov survey among Dubai residents reveals that a little over 70 per cent of the people have not travelled on Dubai Metro trains even for once. The survey which sampled 801 respondents showed that only 1 per cent used the Metro on a daily basis. Those who travelled on the train 2-3 times in a week constituted 4 per cent of the respondents while five per cent said they travelled once a week. Some 20 per cent said they have used the Metro, but less frequently than once a week.

Now coming to the purpose for which the travelers used the Metro, 62 per cent said they travelled on the train just to get an experience of the Metro ride. Some 15 per cent of those who travelled said they were commuting to work while 10 per cent said they took the train for business-related travel. Interestingly, 37 per cent of the Metro riders

were visitors of various shopping malls. Another 20 per cent used Dubai’s new mode of transport to travel around the city. Students going to schools and colleges constituted only 3 per cent of the travelers.

When asked if they would use the Metro regularly once all the stations are ready and functional, 21 per cent said they would, while 19 per cent indicated categorically they would not. Some 44 per cent felt they might travel on the Metro once it becomes fully functional, with 23 per cent indicating they were undecided.

Another interesting result from the survey is that half of the respondents do not believe that the opening of the Metro has resulted in a reduction in the road traffic. Only 4 per cent said they could feel an easing of traffic, while 23 per cent believed some reduction in the road traffic was visible.

Supermarket preferences

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he YouGov lifestyle survey revealed some preferences by supermarket and hypermarket shoppers. According to the results, Carrefour was the most popular supermarket among the survey respondents, closely followed by Lulu Hypermarket. Over 80 per cent of the respondents shopped at Carrefour while 57 per cent also bought provisions and other household items from Lulu Hypermarkets. Union Cooperative was in the third position with 43 per cent while 35 per cent also shopped at Spinneys. Respondents who bought their provisions from Choithram were 24 per cent.

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November 2009

Interestingly, among the shoppers at a particular supermarket, the highest proportion of those who brought goods every week was in the case of Lulu Hypermarkets, with 38 per cent visiting the store every week. The comparable figures for other supermarkets were 29 per cent for Carrefour and Al Maya and 26 per cent for Islamic Cooperative.

Those who bought at their preferred supermarkets for the best price included 58 per cent in the case of Carrefour, closely followed by 45 per cent for Lulu. A little over 40 per cent of shoppers at Union Coop were driven by the belief that the store offered the best price.

Etisalat by far

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recent YouGov lifestyle poll, collected from a survey conducted in the first week of October by interviewing 984 residents, revealed that 68 per cent of the UAE residents use Etisalat as their sole mobile service provider, as opposed to 6 per cent who indicated Du. The remaining 26 per cent said they use both. When asked to indicate which they consider to be their main service provider (the service provider whose services they use most of the time), Etisalat’s figure bumped up 11 points to 79 per cent.

“While these figures aren’t surprising at first glance,” says Amir Bozorgzadeh, Business Development Associate at YouGov Siraj, ”it is when we look at a question further along in the survey when we discover something far more interesting.”

When respondents were asked if in the future they would consider switching from their current mobile phone service provider 57 per cent indicated they would probably or definitely do so. In fact, 22 per cent indicated that they would ‘definitely’ consider the change.

“This is certainly a clear signal that albeit assumptions that Etisalat maintains a strong, monopoly-like, position in the market, there is apt room for du to aggressively take market share should its marketing mix continue to exploit the current gap in consumer loyalty,” says Bozorgzadeh. “Etisalat, for its part, will have to stand steady on its toes and summon up innovative approaches to bolster its current position at the top of the hill.”

UAE consumers more confident

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he UAE ranks as the eighth most optimistic country in the world in the third quarter of 2009. At 102 points, the UAE enjoys more consumer confidence than the global average of 86 – representing a rise of 13 points over six months in the latest Nielsen Global Consumer Confidence Index, conducted in 54 markets during September and October 2009. The global average also rose 9 points since April 2009.

Nielsen’s Global Consumer Confidence Index tracked consumer confidence, major concerns and spending habits among more than 30,500 internet users in 54 countries. In the latest round of the survey, Vietnam posted the largest consumer confidence increase in the 2nd half of 2009 compared to first half, up 24 points from 85 to 109 index points, followed by Hong Kong (+23 points) and Chile (+22 points).

India, Indonesia and Norway continued to top the global rankings for the most confident nations, while the most pessimistic nations were Latvia and Japan. Consumer confidence rose in 45 out of the 52 countries compared to six months ago (Ukraine and Romania were recently added to the survey). The Nielsen Consumer Confidence Index hit its lowest point of 77 index points, six months ago, but as massive stimulus plans began to take effect around the world during the second quarter, consumer confidence slowly began to recover.

The other two Middle East and North African (MENA) countries included in the survey, Egypt and Saudi Ara-

bia, are less optimistic with the index dropping 3 points in Egypt (71) and 1 point in Saudi Arabia (78) since April 2009.

Some 67 percent of Indians, 53 percent of Vietnamese and 54 percent of Chileans expect that the global recession will end in the next 12 months.

Globally, the economy and job security remained consumers’ top concerns, but the level of these concerns has dropped in the last three months, with declines of five and eight index points respectively. In the UAE, 24 per cent of consumers rated job security as a top concern (compared to 36 per cent in April 2009). About 72 per cent of the nation’s consumers have changed their spending habits to save on household expenses, even though more than 65 percent of UAE consumers said that their state of personal finance is excellent or good for the next 12 months.

While global consumers continue to voice concerns about job security and the economy, many have started to focus on other issues. Concerns about work / life balance and health have increased since the last survey.

In UAE, 29 per cent of consumers cite finding a work/ life balance a concern compared to April 2009 (22 per cent) and 17 per cent are concerned about health versus 6 percent in the six months ago, an indication that UAE consumers’ focus on economy and recession is beginning to subside.

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Gulf less affected

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lthough businesses in the Gulf have been hit hard by the economic downturn, they are less negatively affected than others by changes in consumer demand and global commodity prices, the ICAEW Global Enterprise Survey revealed.

The 2009 ICAEW Global Enterprise Survey measured the impact of the economic downturn on businesses in five regions across the world; the Gulf, the UK, EU, Asia (Hong Kong, Malaysia and Singapore) and the US. The Survey found that Gulf businesses were the most positive in their growth expectations, with two-thirds planning annual turnover growth in excess of five percent, ahead of all other regions. Additionally, most Gulf businesses regard their domestic regulatory and taxation environment as business-friendly (87 per cent), much in line with those in Asia, but ahead of those in the US and, particularly, Europe. Gulf businesses are however more

likely than those in other regions to witness high shortterm borrowing costs.

Those Gulf businesses affected by the downturn anticipate, typically, that it will continue for another one to two years (47 per cent) -- half way into 2010 or 2011 – much in line with views in the other regions. However, 40 per cent of them were expecting the end of its effects within the next year, a little less optimistic than those in Asia (nearly 50 per cent) but more optimistic than those in the EU and US (around 30 per cent).

Gulf businesses are generally positive about the benefits of the globalisation of markets and are looking to expand their international trading activities. However, they see corruption as the greatest barrier to international expansion and are also more likely than those in other regions to cite access to finance as a barrier to globalisation.

Most businesses lack in business continuity planning eHosting DataFort and BCM Institute Launch Industry Survey Report on Status of Region’s Business Continuity Management An industry survey conducted by eHosting DataFort, managed IT and advisory services provider, and Business Continuity Management (BCM) Institute, revealed that almost 70 per cent of the region’s organizations have not put in place a robust Disaster Recovery or Business Continuity Management (BCM) programme, despite growing major disruptions and disasters caused to businesses in the region.

Participants in the BCM survey perceived failure of computer hardware/software and data loss as the highest risk to business disruption, with 21 per cent of the executives stating that natural disasters such as storms, floods and earthquakes were of particular concern. eHosting DataFort, who is a member of TECOM Investments, conducted the Business Continuity Management survey among organizations across the Middle East - including UAE, Saudi Arabia, Bahrain, Qatar, Oman, Kuwait and Jordan. Over 75 organizations across the Middle East, including banking and finance, IT, retail, media and entertainment, utilities, oil and gas and manufacturing participated in the survey.

While almost 60 per cent of participants claimed they had documented a continuity management plan

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November 2009

for their organizations, they are not however, part of a fully-fledged BCM programme.

The types of business continuity planning that companies have taken include the provision of an alternative work site in the event one location is unavailable and an automated communication with the company’s continuity management team. Having an established relationship with external agencies including the local police, fire stations and hospitals is another form of business continuity planning.

Nearly 38 per cent of the respondents revealed having more than 20 years of experience in dealing with business continuity planning one way or the other, although 40 per cent stated they did not have a specific individual to head or coordinate business continuity management in the organization.

Detailed results of the survey have indicated that a number of significant business disruptions in the past year were caused by network failures (45 per cent), followed by power failures (20 per cent), manmade disruptions including theft, hacking attempts, sabotage, poor judgment (11 per cent), and natural disasters such as sandstorms, floods and earthquakes (8 per cent). The economic downturn has further contributed to significant corporate business disruptions due to non-premptive measures by the corporate houses, according to respondents.

UAE employers ready to start hiring More than half of the region’s employers—52 per cent- are planning to recruit over the next few months, as the region picks up following the global economic downturn- 26 per cdnt definitely hiring and 26 per cent probably hiring, according to the new Jobs Index study conducted by the region’s number one job site Bayt.com, in conjunction with YouGov Siraj.

In the UAE, a quarter of the respondents said that their organisations would definitely be hiring in the next three months, and another 23 per cent said they would probably be hiring. Just under a fifth, 19 per cent said they probably or definitely would not be hiring in the next quarter.

Around the Middle East and North Africa region, countries reported varying propensity to hire as part of the Jobs Index. More than a third of respondents in Oman, 34 per cent, said they would definitely be hiring in the next three months. This was closely followed by Saudi Arabia and Lebanon, where 31 per cent and 30 per cent respectively said their organisations will definitely be recruiting new staff in the coming months.

Around the Gulf, the countries largely varied in terms of their intentions to hire more staff. In Qatar, 55 pre cent said they would definitely or probably hire in the coming three months, compared to 53 per cent in Kuwait and just 47 per cent in Bahrain. The figures suggest that organisations in Saudi Arabia are currently faring the best during this current economic cycle.

The Jobs Index (JI) is conducted to gauge perceptions of job availability and hiring, to identify job trends and to provide an understanding of the key skill sets and qualifications required in the Middle East job market.

When asked how many jobs would be available in the next three months, 42 per cent of respondents said that there would be less than five jobs ‘on offer’ for job seekers in their organisations. Another 24 per cent said that their organisations would be offering around six to 10 jobs, while at the other end of the spectrum, just 3 per cent of the respondents said that more than 100 jobs would be available.

In terms of the jobs that would be available in the next quarter, junior members of staff are the most likely to be employed; 22 per cent of organisations said that they would be looking to employ junior executives, followed by 21 per cent who said that said they would be looking to hire on an executive level.

According to the study, organisations around the Middle East favour employing staff that are graduates in the fields of engineering or business management: 21 per cent of organisations agreed that these two were the most important disciplines. The Gulf countries

also showed a significant preference for graduates in these areas. Less important qualifications according to the study were in law and hospitality, with just 5 per cent and 4 per cent of organisations respectively agreeing that these are important when selecting staff.

Good communication skills in English and Arabic were clearly advantageous among the region’s organisations when selecting a new employee: 60 per cent said that these skills were most desirable when choosing potential candidates. Lebanon and Saudi Arabia were the countries that placed most emphasis on these bilingual skills, with 71 per cent and 69 per cent respectively citing them as the clear skill priority. In the UAE, just 55 per cent of employers stated that English and Arabic language skills were important; while being a cooperative and helpful team player and possessing good leadership skills were all similarly important traits in new recruits.

All of the Gulf countries, with the exception of Qatar, came across as optimistic for the future in terms of projected capacity to hire. Following Saudi Arabia’s positive lead, 38 per cent in Bahrain and 34 per cent in Kuwait said they will definitely be hiring next year, compared to Qatar’s total of 31 per cent – the lowest figure among all the surveyed countries. Notably, respondents in Algeria (45 per cent), Jordan and Tunisia (35 per cent each) all said they will be hiring in a year’s time, suggesting significant predicted growth in these countries.

When asked how they rate their current country of residence as a job market compared to those around the rest of the region, respondents in the UAE were the most positive about their country: 49 per cent said it was much more attractive than other countries. Positivity about current country of residence was also felt in KSA (44 per cent) and Qatar (38 per cent).

Asked which industries the respondents feel are attracting or retaining top talent in their country of residence today, the majority agreed it was either banking and finance (32 per cent) or telecommunications (31 per cent). “This is most likely as a result of the perception that banking and finance and telecoms positions are the highest paid in the region, and as a direct result, manage to retain their well-paid talent,” explained Longworth.

Data for the October 2009 Jobs Index was collected online between 1 and 21 October 2009 with 5,084 executive managers/HR managers/senior officials from the UAE, KSA, Qatar, Oman, Kuwait, Bahrain, Syria, Jordan, Lebanon, Egypt, Morocco, Tunisia, Algeria and Pakistan. Males and females aged over 18 years old, of all nationalities, were included in the survey.

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C OV ER STORY

Stuffing the rooms Hotels are going the extra mile to woo customers as occupancy levels dip 8 BANKING AND BUSINESS REVIEW

November 2009

By Ambily Vijaykumar

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ver 50,000 more hotel rooms are expected to be added to Dubai’s inventory in the coming years. Some say it is a clear indication that the hotel industry is poised for further growth. Others cite this as a part of efforts to make ‘affordable’ hotel accommodation available to visitors. But the industry insiders are agreed on one thing: interest in developing luxury brands is fizzling out and it is giving way to a keen focus on the mid-market segment that is poised to grow in the years to come.

The switch is the result of dipping occupancy rates. Top brands like Jumeirah concede that they had seen their initial 2009 occupancy rates slip to the 70s before some massive promotional activities helped them bring these back to the 90s again. The problem was further complicated by the fact that the Dubai hotel room rates were unduly high. The average hotel room rate in Dubai has been measured to about $226 per night, which is on par with destinations like New York. The rate, the industry expects will be maintained between $190 and $200 in the coming year.

Average rates are not, however, a reliable indicator of the well-being of the sector, say industry insiders.

You could have the rates running high despite having very low occupancy rates hence the average rate is a rather misleading figure. It is also no secret that tourism, which plays a major role in the Dubai economy, has taken a massive hit since the onset of the financial crisis. Hotels that form the backbone of the tourism industry have hence been affected adversely. The hospitality industry on the whole seems to have reconciled to the fact that when it comes to occupancy levels, it would be over-ambitious to expect a revisit to levels of 2008. “Sixty five is the new ninety.”

This is the new standard for measuring the health of the hotel industry.

During the boom, occupancy levels were maintained in the 90s without much effort. The overflow in one hotel would spill over to the remain-

Top brands concede that they had seen their initial 2009 occupancy rates slip to the 70s before some massive promotional activities helped them bring these back to the 90s again ing hotels and everyone benefited.

But that stopped once the footfall dried up and even maintaining rates in the 70s became a tough task.

Though occupancy rates are a good indicator, it is the revenue per available room or RevPAR that the industry uses to decide the direction in which it is heading. With an average drop of about 35 per cent in RevPAR since 2008, Dubai still managed to outdo places like London and Hong Kong this year. While hoteliers attribute it to the Dubai market being ‘resilient’, they add a word of caution that the industry here would further continue the ‘trend of adjusting these rates’ in 2010 to be in line with destinations like London and Paris. The rates are expected to stand between $140 and $150 per available room.

According to industry sources, the adjustment was long overdue since “Dubai was not a mature market”. In a mature market the demand is not

driven as much by foreign tourists as it is by the domestic market and that was something lacking in the destination. According to these sources, the supply did not correspond to the nature of the demand and hence the thrust of the future will be geared towards developing the three stars and the four stars rather than an overriding focus towards the five star and other super luxury segments. “There is increasing emphasis on diversification of the portfolio,” says Siegfried Nierhaus, Director of Future Openings Middle East and Africa, Rezidor Hotel Group.

“With construction prices still going down, we are telling owners who have the money that this is the time to invest. Of course they have to look at the location and also the market that they are trying to target. So it is for them to choose whether it is the five, four or three star. We have signed two hotel deals in the mid-

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November 2009 9

market segment and I think this is the marked change in the business that people are looking at four star properties as well and not chasing the five star segments blindly,” he adds.

The reality was very different a couple of years back, when owners were only interested in luxury brands. It was a ‘take it or leave it’ scenario and operators also did not hesitate to take the risk to a certain extent and move ahead because they had the faith that their system would deliver. In contrast, owners have become more “flexible now” on the kind of property that they would want. The willingness of owners to go towards rational investment is way higher than it used to be two years ago. The key feature of mature markets is that the mid-scale represents two-thirds of the total availability and the luxury brands form only one-third of it. It has been a reverse ratio in the UAE on the whole and when the market here matures it has to be on par with the rest of

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In a mature market the demand is not driven as much by foreign tourists as it is by the domestic market the world.

A case in point is the opening of the Express hotel by Holiday Inn. The local Rotana group has also stepped out of five stars into the three stars segment with the Centro Hotels targeting the “budget conscious executive,” which the group thinks is an increasingly important market in the Middle East. The Centro Hotels concept is specifically designed to appeal to large corporate entities, small and medium business owners and individual traveler.

Like low cost airlines, budget hotels are also expected to give everyone involved in the industry “value for money”. Giving value for investments is also the reason behind a new trend that observers believe will be the future of the hotel in-

November 2009

dustry for some time to come. The trend is that of conversion. It is a well-known fact that Dubai has been facing trouble with occupancy levels in their ready properties since the crisis. This has meant that owners of several buildings that were built as apartments are now approaching hotel management groups to see if they would be interested in running them as a residence.

“Existing properties are showing keen interest in attaching themselves to an international brand and there is a huge demand for that in the market,” says Siegfried Nierhaus.

The reason behind this trend is that international hotel operators have the necessary experience and resources to be able to tide through an economic recession, compared

to the case of a small operator. Operators who are currently running those properties are either less experienced or don’t have the system to carry on in a crisis situation like this.

The appetite for conversions is being seen in places like Abu Dhabi and Doha. Also with the tilt towards enhancing marketing and sales efforts, international brands have become the chosen ones.

This phenomenon is not just restricted to residential buildings alone.

It extends even to hotel constructions that are close to opening but are keen on branding themselves.

Recently the Rezidor Hotel Group converted a hotel in Saudi Arabia to a Radisson within four months and the group is of the firm belief that the future for the hotel industry is heading in that direction; their confidence in backing the conversion trend is also being built by the fact that one such development in Dubai has been a success. This has also prompted the group to diversify the portfolio and branch into hotel apartments. The group says it is negotiating “a few properties in Dubai” for conversion at the moment.

Sweeping changes in the industry has also meant redoing of roles for various players involved in a property. Whether it is the developer or the buyer, the operator or the service provider, everyone has had to revisit their respective positions to assess where their market is and who is their target customer. This has had an inverse effect with sellers not willing to negotiate a deal with a buyer because they want to get the best of rates, buyers not willing to part with money because of the expectation of very high returns and the operator who is keen on entering the property to manage it but unable to do so.

But now even service providers, who earlier would walk away with a hefty pay package in lieu of a defined job, are playing the role of mediators; an example being a construction and property consultancy firm bringing in developers, inves-

The key feature of mature markets is that the mid-scale represents two-thirds of the total availability and the luxury brands form only one-third; it has been a reverse ratio in the UAE

tors and operators onto one table for a distressed four star project.

“As a service provider, we really have to go all the way,” says Shaad Heerah, Vice-President Hospitality, MENA region, Cyril Sweett International. “What is happening is that things are getting more personalised and it is all about relationship management. Service providers have to come up with innovative solutions, where we are sitting with investors and hotel owners on board and it is not easy to crack the deal and the challenge is to be able to do it. Our approach has become one of a doctor who listens and then facilitates,” Shaad elaborates.

Service providers are also playing facilitators for the growing trend towards budget hotels. They say that is the need of the hour rather than hav-

ing empty ready properties that would not drive occupancy rates if they are taken over by luxury brands. The industry believes that Dubai is slowly shedding its image as an expensive destination and so through the crisis, with rates correcting themselves, the emirate has succeed in attracting a new clientele. Existing hotels that have been hit hard by the tumbling numbers have also had to pull up their socks. Innovative methods of not just operating but also budgeting, marketing and customer service have become the hallmark of the hotel industry in the UAE over the past twelve months.

“They have taken off the excess chocolates from the dessert,” said Paul Mcpherson, the Chief Development Officer of Jumeirah Group. When the group was faced with a dip in occupancy rates at the beginning of the year, they had to revisit their programs including their visa program, working with the DTCM (Dubai Department of Tourism and Commerce Marketing) as well as their loyalty program and all that helped them in getting back into the 90s bracket for their beach properties.

With boom time average rates peaking at Dh3000, the group says it had enough financial cushion for “a safe landing and recovery” when the crisis struck. Rates, however, have also played the spoiler on several accounts. Considering that customers

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have become more internet-savvy, sitting down to compare rates and also make their booking just in time for the travel, this has put further pressure on room rates.

Resulting from this newfound customer tool is the introduction of the fluid rates into the leisure segments.

Travelers who earlier used to book their destinations and accommodations months in advance have now narrowed down the time to either weeks or days. Fluid rates help hotels in boosting occupancy rates during times of lean footfall. The liquid rates were always in operation for visitors who walked into the hotel on a non-contracted business. The flip side is that for an international tour operator having non-contracted rates does not work since it does not help a hotel brand position itself in

the market.

Frequency of repeat customers has also dropped making customer behaviour study an arduous task for hotel operators. The drop in frequency is a result of the nature of the customer travel in the post-crisis market. Events are a major source for customers for the industry. It not only assures higher occupancy rates but also pre-contracted room rates.

With companies shifting focus to trimming their expenditure, there is a change in the profile of the customers visiting hotels. So earlier if a company sent ten employees including its President and VPs, now the President chooses not to travel at all.

This puts less stress on the coffers of the organization, since junior executives will cost less to accommodate than the higher ups.

Whether it is the developer or the buyer, the operator or the service provider, everyone has had to revisit their respective positions to assess where their market is and who their target customer is

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Plunging rates have been a reality, but also a cause of concern for hotels, which say that putting undue pressure on rates will only damage the reputation of a destination like the UAE and convert it into a “cheap option” and not necessarily an “affordable option”.

Hotel giants complain that some tour operators did try to drive the place down to a “50 dollar” destination and that did have a negative impact on the rates, but it is not good in the long run. What lower rates fail to do sometimes is give the hotel operator an edge in a market where everyone is shedding rates. The newfound buzzword, customer service and satisfaction, then forms the fulcrum around which hotels now operate their sales and marketing activities as well as their customer service approach. Whether it is a regular customer or a new one, the endeavour is to “add a personal touch” to the stay.

Over and above the room rent, customers also spend money on other things during their stay at the hotel. This has become the focus area for a few hotels that are now going the whole hog and giving these items for free. They assure that there are no hidden costs involved in this. Depending upon whether a customer is on a family visit or on business travel, the offers are being modified. A family is given free breakfast while a businessman on travel, who does not care much about a morning snack, is being given free internet facilities.

Individual travelers are being lured with personalized offers while corporate clients are being shown lenience when it comes to footing the bill. “If a company is going through a financially tough time and they have been one of our loyal customers, we help them by bending our credit rules and regulations and allowing more credit time to pay their bills,” elaborates Naeem Darkazally, Area Director of Marketing and Communications, Rotana, Dubai and Northern Emirates.

Staying on the radar is also a crucial aspect for ensuring that there is steady business flowing in. That has

prompted many hotels to enter tieups with leading banks in the UAE to keep up their image in the customers’ eye. Many have forged joint marketing strategies with banks to increase visibility and boost customer interest. Co-branding is helping both these sectors to find a comparatively strong platform from where they can reach out to a larger audience and rebuild themselves.

The industry feels this is not the time to swim against the current; what is probably needed is to optimize available resources and be innovative with marketing and sales activities. One such innovative technique that is working for several hotel groups is the ‘request upon arrival’ program. Under this program, clients can request for certain items to be made available in their room or can request an upgrade to a different kind of accommodation even before they arrive at the hotel. So if a person has a reservation, all he has to do is to go on the net and make the request and those items will be made available to the person upon arrival. This scheme works for people who know they would be arriving late at night or early in the morning and would want to either have their dinner or breakfast available when they arrive.

Key customers are the true beneficiaries of the industry’s new-found need to hold on to existing customers for the fear of losing them out to competitors. This has led many top players to aggressively tap the online market. For instance, a leading hotel brand has a system of econfirmation. The system, the group says, is becoming very popular with their customers. The new addition is called the ‘virtual-concierge’ that gives e-confirmation to a customer travelling to the country as they approach their travel date. The customer is given options for booking a limousine for instance or information about the weather in the city of travel or getting a restaurant reservation at the hotel when they arrive.

Hotels are now studying customers’

Internet-savvy customers, sitting down to compare rates and also make their booking just in time for the travel, have put further pressure on room rates pre and post arrival requirements so as to make the experience of the stay with them a memorable one.

Apart from individual customers, bookings for conferences and meetings are also being used as a platform to introduce new service tools.

For instance, a leading hotel brand has introduced the facility to do customized web pages for clients who book the hotel for an event. The facility allows clients to have their own web page that their delegates can then use to book their accommodations through. These customerspecific booking tools are not only giving end users the edge in terms of the final rates but are also giving hotels the ability to drive up their occupancy rates and customer satisfaction levels.

The hotel specific promotions come in addition to the general trends in the industry, where offers include free night stays, upgrades, complimentary nights as well as visa provisions. With an addition

to the inventory expected this year and through the next, the industry is largely optimistic about the scope for business in the UAE and the GCC in the future. While many are branching out into sectors where there is a dearth of infrastructure like several countries in the African continent, many are also looking to Central Asia which they say is the emerging market.

Within the UAE, the focus clearly seems to be tilting towards Abu Dhabi, while Saudi Arabia is gaining favour as the new ‘blue-eyed boy’ for the hotel industry in the region. Other markets include Lebanon, Jordan, Libya, Morocco, Qatar and Oman.

The industry is also of the firm view that working in tandem with government authorities in the UAE is imperative to market the destination as “less expensive” if it has to stay in the competition and not lose out to other Middle Eastern destinations that are aggressively promoting themselves as the next best bet.

BANKING AND BUSINESS REVIEW

November 2009

13

Selling through the brand Hilton says new strategies help in retaining business

By Ambily Vijaykumar

“I

n difficult times, relationships make a big difference.

People you know and trust you will have the business taken care of,” says Essam Abouda, Vice President Operations, Arabian Peninsula and the Indian Ocean for Hilton.

The comments are a reflection of the changing trends in doing business for the hotel industry in the UAE and the world since the financial crisis. One of the distinguishing aspects of this crisis is that unlike the earlier ones, this has had global repercussions and there is no clarity on when the end would come.

Hilton says that despite the repercussions of the crisis, the Middle East has not been as adversely affected as other parts of the world. There is data to back the assertion, says the hotel chain. Positive results have been achieved largely due to the “strong and stable economy” of the UAE, says Essam Abouda.

“The strength of the marketing magnitude of the Middle East especially in places like the UAE, where the marketing machinery and the drive for promoting the destinations, the special offers and promotions, the airlines and the government departments helped

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BANKING AND BUSINESS REVIEW

Hilton says that despite the repercussions of the crisis, the Middle East has not been as adversely affected as other parts of the world Essam Abouda

in a major way to sustain and to make sure that the leisure industry was not adversely affected,” he explains.

The group on an average dropped its rates by about 20 per cent and claims it has managed occupancy rates between 80 and 90 per cent in its properties in UAE. In Dubai for instance, right after the crisis, Emirates Airlines launched its promotion for summer where children up to 16 years of age got free ticket and also free accommodation. That proved to be a big promotion in the European

November 2009

market and helped attract a substantial amount of business from there.

While rates have undergone a change, what has remained unchanged for Hilton is the profile of customers.

“We don’t think that the buying power of our clientele has been affected,” says Essam Abouda. Usually when there is a drop in rates, the kind of customers that a hotel attracts changes. Hilton says that with the onset of the crisis and a reduction in long haul travel, the group is focussing on attracting clients from within the GCC.

Tourist count, however, has seen a massive drop with a dip in global travel, so even promotions are not a fool proof method to drive up the numbers. This is where the industry believes that “innovative sales techniques” are being used to spur business activity.

“We don’t think that cutting rates is the only way to attract business. Innovative ways of presenting the business makes a big difference. Everyone can drop rates and you will see winners and losers and you see others drop rates even further, say by 50 per cent and even then you see that the client goes to a higher brand or to a more expensive hotel, because he believes that he gets more value for money,” argues Essam Abouda.

Urgency has then been internalised as part of the new business model that the industry has learnt since the crisis set in. Hilton says that there is no longer time or room to put a decision off to a future date. “A goal and time limit have to be set beforehand to survive in the market today,” he explains.

Promotional activities involved the request upon arrival program. Clients could request for certain items to be available in their room or request for an upgrade to a different kind of an accommodation. The Hilton Extra nights offers rewards as long as a client stays at the hotel. A unique and first time program has been the Hilton Honours where customers get rewards in miles as well as points at the same time. The GCC clients were targeted during the summer months and that paid off rich dividends. Because of its proximity to the UAE, travellers from Kuwait, Bahrain and Saudi Arabia represented a very good portion of the hotel’s business at that time.

Part of the hotel chain’s innovative sales technique involved concentrating on the spa and the food and beverage section, which holds a lot of promise.

On the sales front, Hilton made sure that the group as a whole was being promoted rather than launching separate promotions for its hotels in various destinations.

“Instead of each sales person from each hotel going and selling, we looked at the cluster of hotels where they deal

Part of the hotel chain’s innovative sales technique involved concentrating on the spa and the food and beverage section, which holds a lot of promise with the same operators and maximised the benefit through our relationship for all the hotels. For example if we contract for Abu Dhabi and Dubai with five top travel agents, we made sure that these people were being contracted through one key person who represented Hilton.

Same was the case with our international destinations. Instead of working against each destination with the same hotel chain, we went there as a team and maximised the benefit for all our hotels across various places,” elaborates Essam Abouda.

Talking specifically about Dubai, what has largely impacted the tourism business in the emirate is its aggressive promotion as a shopping destination.

The financial crisis has hit the retail sector and that is reflecting in the Dubai market as well. So did Dubai overdo the shopping theme?

Hilton does not agree. The group says that the emirate has intelligently marketed itself as a destination that offers not just the shopping experience but also “the sun, the sea and the sand”. This they believe is the USP of the place and that needs to be built on.

Also the opening up of big hospitals is slowly paving the way for the emirate to emerge as a future medical tourism destination.

“Coming to Dubai should almost become like a fashion statement and that is something that the government should be working towards. The place needs to be promoted as one where tourists say that they have been to the Atlantis, the Burj Al Arab, they have skied in the snow at the Mall of the Emirates and in the afternoon went water skiing in the lovely weather,” suggest Abouda.

On medical tourism, Lebanon has been massively promoting itself in that area. But Hilton believes that there is massive scope for Dubai to pose a good challenge to Lebanon with its hospitals, leisure facilities and infrastructure.

The challenge then arises in the sales department at each hotel which in the past were engaged in “managing the yield” rather than “selling aggressively”. With the earlier advantage of excess customer clearly absent from the market, every individual for the hotels becomes a sales person. It is also about image building and upkeep.

“A door man can also sell. While opening the door or escorting the guest to the reception, if he makes the effort to promote the outlet, then a sale has been made. Same is the case with the houseman. While going to the room of the guest and at being asked a question about what needs to be done, he gives the right advice, then again he has made a sale,” explains Abouda.

There is no longer the luxury of regretting business as in the past. Focussing manpower and money on the top ten accounts in business is essential, says Hilton. “That is the key area from where we are getting business,” explains Abouda. Whether it is leisure or the corporate segment, the idea is to not cut off communication with clients but to keep them engaged for possibilities in the future as well.

Looking into the future, Hilton is negotiating between 50 and 60 projects across the Middle East. Out of that figure, the group aims to create at least 20 solid deals from. A few of those projects have either been signed or are already under construction. The process is also being aided by the fact that construction costs have come down and with the budget of completing a said project has dropped down by at least 35 per cent.

But location is the key, says Hilton.

“If a hotel is well-positioned in whichever destination it is, it stands to gain.

We have also noticed that brands have managed to sustain and attract more business as compared to unbranded hotels. Clients will still go to the names they trust,” Abouda says.

BANKING AND BUSINESS REVIEW

November 2009

15

Rates do the talking

Marriott says it has moved resources to more promising sectors such as catering

By Ambily Vijaykumar

I

t is the average rate that has taken a beating for Marriott rather than the volume over the last one year.

A loyal customer following in the UAE as well as globally has assured that the customer flow remains largely unaffected by the crisis. The driving force behind dropping rates is the financial crisis compounded with the influx of inventory into the market.

Average rates for the Marriott dropped by about 20 per cent, also corresponding to a similar drop in revenue for the group since the crisis set in. While that has been on the room side, the hotel has been focusing attention on the food and beverage segment that has shown a lot of promise.

The meeting segment is witnessing a slowdown and Marriott says it has reacted quickly by moving resources to other segments that hold promise. That includes the catering segment.

“We have been able to see growth on the food and beverage segment year on year. Outside catering and doing large customer events have been good; we are also the official caterers for the Dubai International Air Show; we also do a lot of concert catering, and sports events.

So subsequently we have succeeded to find revenue from other areas and hence our numbers have actually grown on that. Even Ramadan was an interesting month as we have registered a 43 per cent grown in Iftar revenue year on year,” reveals Paul Rushton, Director Sales and Marketing, J W Marriott, Dubai. The message from the group is that people are still spending and it is for the hotel industry to tap into new avenues.

While people are spending, they are also becoming very choosy about where and what they spend on. That also poses a challenge for the hotel industry in terms

16 BANKING AND BUSINESS REVIEW

Paul Rushton Marriott

of reinventing the service offerings. Marriott says it hasn’t had to do any “radical shifting” in the service promises. A good understanding of the customer base, some of whom have been with the group since its opening in Dubai, has helped the group to get a proper understanding of what their requirements and preferences are.

Marriott maintains that the customers see the services that it offers as very good value for money since the way it has positioned and priced the offers are in keeping with “customer expectations”.

“We are priced fairly in the market, we are not overpriced and our offering has been in line with what customers would like. So we haven’t found any drastic change in their demands,” elaborates Paul Rushton. With the corporate meeting and conferences decreasing at the

beginning and middle of the year, there is renewed activity in that segment and that holds promise for the group. Though the size and nature of these events will not be on par with the previous years, the revival of activity is a positive signal, says Marriott. The group also maintained its loyal GCC clientele through the year. What also worked for it is Dubai’s strategic positioning that enables travelers from Europe and UK or going to these destinations using it as a transit point for their journeys.

From a customer service standpoint, knowing one’s main customers and accounts is the key to survival. From the sales deployment point of view, the group says the team makes it a point to stay in regular touch with these clients and maximize business opportunities coming out of these accounts.

“There is increased activity and intensity around our locally-driven account. On an international level, it is similar intensity with our account directors who look after global accounts. They are very close to those customers, talking to them on a regular basis and staying in touch with them so that if they do need to react early in terms of pricing or value additions rather than react two or three months down the line, they are in a position to do that,” informs Paul Rushton.

The urgency has come about because of the large number of hotels vying for a smaller portion of the customer base that is available now. No one wants their accounts to be stolen. The strategy is to protect and grow their market share. While sales are taking care of maintaining a personalized feel to the Marriott experience, as far

While people are spending, they are also becoming very choosy about where and what they spend on November 2009

as the marketing segment is concerned, the concentration is to “build a message around community service activities and tactical campaigns”. These tactical campaigns are predominantly food and beverage.

Though there have been no dramatic changes in strategy, the group says that with the GCC, it has increased the frequency of doing direct sales shows. Previously if these shows were once or twice a year, now it is about five times a year with the idea to re-visit clients more often.

Personalised customer service varies from individual customer requirements.

While some of the business clients look for internet facilities, others want transport to and from the airport. Some seek allowance to cover their food, beverage and laundry needs. Each requirement is closely monitored and delivered, says Marriott.

“Customer demands also change depending upon the kind of experience they are seeking. On the leisure side, you have two kinds of customers. First is the person who wants to have the beach experience and enjoy the beach property and the second is someone who is a stopover customer and is using Dubai as a stopover to some other place. So we have kept our eyes and ears open to these customer needs and have targeted those source markets and those distribution channels that would support that strategy,” says Paul Rushton.

Success of these strategies is reflected in Marriott’s claim that it has maintained volumes from the beginning of the year.

That the group says has also helped “maintain” the market share. In fact, the chain claims it is outperforming the market.

“We have been able to maintain volume. We read the signals earlier that there was a slowdown occurring and subsequently we positioned our rates to be able to capture the business coming through rather than being too aggressive and losing out on potential opportunities,” Rushton elaborates.

Bringing rates down however is what most hotels did, so the true test then lay in the quality of the product and the service. Marriott says that with a “good reputation in terms of responsiveness” it stood to gain in a market that was fast

Success of its strategies is reflected in Marriott’s claim that it has maintained volumes from the beginning of the year losing out customers.

“If we have a conference enquiry, we will turn that quotation around for our customer within a three hour period. We try to position the cost right straight away so that we don’t have to keep re-writing it. This turnaround time of about three hours is way below the market norm of about 24 to 48 hours. Apart from that what we ensure is a perfect delivery of the event. So any issue of either service or delivery is taken care of because of our huge experience of the market,” Rushton explains.

Online activity is also getting renewed focus with a growing number of clients preferring to use that as a medium of not just booking but also getting the best deals. The features include access to corporate rates online. With the feature being coded, clients can secure the information since it is a confidential deal between the company and the hotel. This enables in taking the pressure off the travel coordinator and the company that the actual executive can book his travel requirements and reduce rates. Another provision is online conference requirement management. A unique for the company is enabling companies to update their participant list online directly

into the Marriott inventory. The group says that this feature has been widely appreciated by their clients.

E-confirmation is another online feature that the group is offering. A virtualconcierge sends out an e-confirmation to a customer who is travelling to a specific destination as his travel date approaches.

A customer can book a limousine on-line, a snack on arrival or a restaurant reservation. They also do customized web pages for their corporate clients so that they can then ask their delegates to log into it and book their accommodations through it.

Online is thus becoming a big reservation tool for the group.

Marriott says that the experience of staying at a hotel is becoming more personal. Looking into 2010, the group says that the promotional activities are going to be largely centered on the meetings business. “The coming year will be a challenging year but it won’t be a dire year,” says Rushton.

Looking into the future opportunities for Dubai, Marriott says that with the infrastructure readily available and more being set in place, the emirate can come up as a major hub for large association and congress business. What is needs is a continued proactive marketing campaign.

BANKING AND BUSINESS REVIEW

November 2009 17

‘Liquid rates’

is the new buzzword Rotana’s move to offer ‘affordable luxury’ helps tide over crisis

By Ambily Vijaykumar

D

ubai as a city managed to get enough attention in the third quarter of the year, says Naeem Darkazally, Area Director of Marketing and Communications, Rotana, Dubai and Northern Emirates. That was largely due to the hotel industry in the emirate and the country as a whole reacting proactively to the changing trends in the industry with the onset of the financial crisis. With occupancy rates staying well within respectable limit, hotels believe that Dubai managed to avert the risk of hotels running into losses due to low occupancy rates and dipping average rates.

“During a crisis, the fastest gets the best,” says Darkazally. “You need to change your plans and adapt your marketing plans and expenditure to attract new customers and new parties that you want to work with,” he adds.

Traditionally Dubai has positioned itself at the higher end of the feeder market. With a Dh1,000 average rate, it was becoming increasingly difficult to find the best deals for hotel operators to work with. The crisis meant that international tour operators insisted on “better deals” to be able to sell a package to prospective customers and so did the corporate, which wanted to trim budgets.

“There was a demand and supply factor that played in our favour earlier but today that has changed,” says Darkazally. He refrains from putting the blame for the drop in rates entirely on the crisis. The influx of inventory

18 BANKING AND BUSINESS REVIEW

Naeem Darkazally Rotana

into the market also had a lot to do with driving the rates down, he says.

“When the Atlantis opened, it changed the Dubai tourism map forever,” he opines. Additional rooms also forced hotels to slash rates. Rotana says it dropped it by anywhere between 15 and 20 per cent to maintain RevPAR (Revenue per available room) in the second quarter of the year. “The average rate becomes ineffective in meas-

uring the profitability of the business since hotels could have higher room rents and less occupancy,” Darkazally explains. The third quarter saw the rents slip by as much as 50 per cent across the board for several hotels.

Several summer campaigns were very aggressive. Rotana says that they brought down rooms rates to as little as Dh 250.

Reduction was not to the extent that “downgraded the city,” says Rotana. The flip side of bringing down costs is that a city like Dubai that has worked over the years to position itself in the Middle East as well as globally as a sort of a “wonder of the world” will take a beating. Dubai’s packaging as a unique city in its presence and its culture, its cosmopolitan nature with its mega projects has attracted a certain clientele over the years, and the hotel industry feels it stands to lose if operators drove it to making it a “$50 city”.

“It will be a crime to do that to a city like Dubai. There are places that are chartered flight cities because they do not have international airports. There have been several hotels in the emirate,

Traditionally Dubai has positioned itself at the higher end of the feeder market November 2009

which have dropped rates to generate 100 per cent occupancy, but that is not good in the long term interest of the city,” Darkazally argues.

Going further, however, Rotana realised that rates should not be allowed a free fall. With parties involved in the business, including third party brokers, travel agents, travel management companies and tour operators, re-contracting and re-evaluating their contracts, it became imperative to reassess the market requirement. Even corporate clients re-contracted their rates more than three times this year, a hazard that needs to be taken to stay competitive.

Not just the corporate segment, but the leisure segment also took a different turn. With international tourists being very sensitive to issues like the H1N1 or the crisis, they decided to work with last minute rates rather than a contracted or a re-contracted one. They began demanding weekly and in some case rates every few days. The concept of liquidating rates thus entered the leisure segment of the business for Rotana, which is one of the few to introduce liquid rates into the market.

The impact has been positive to the extent that it has given Rotana the “flexibility to be able to bend our rates up or down depending on our occupancy levels and also upon the market trends to be able to attract and protect our market share,” says Darkazally. With increased customer interest in the online activity with regard to comparing rates as well as booking, hotels are turning towards the medium to make themselves more visible and easily bookable. Cutting costs is not restricted to individual travelers. It has also reflected in the way corporate organizations handle their travel itinerary. With the new tools of attracting customers, hotels might be able to hit a good occupancy rate, but then a closer look reveals that the frequency of repeat travelers has dropped.

Take exhibitions for instance. Previously companies would send a large number of people and many of them would be senior executives. But now with cost cutting topping the agenda, the top brass is choosing to skip the trips. That has meant less expense for the individual companies and less con-

Amwaj Rotana

The flip side of bringing down costs is that a city like Dubai that has worked over the years to position itself in the Middle East as well as globally as a sort of a “wonder of the world” will take a beating tracts for hotels.

The crisis has also resulted in customers becoming very aware of the services that are being offered to them for the money they spend. Since everyone is trying to save the dollar, the demand is for the best that the money can bring.

“The essential services in the hospitality industry cannot change. The cleanliness and the staff friendliness

cannot be replaced. You have to have a receptionist at the reception and a waiter at the restaurant. The bed sheets have to be right and so do the pillows. What we are doing though is to orient our staff to continue the emphasis on detail since the customer will be watching closely henceforth,” says Darkazally.

Luxury alone is not what customers are looking for today. The demand is tilting more towards value for money.

BANKING AND BUSINESS REVIEW

November 2009 19

This opens the door for the future development of the mid-market segment that includes the four star and three star hotels. The hotel industry on the whole is of the opinion that it is the future. The new avenue has also caught Rotana’s attention and the result is projects like the Centro Rotana, which is a three star hotel of the brand. The product is targeted at young businessmen “who do not have the time to sit down and have an hour long lunch or a half hour breakfast”. For young entrepreneurs who wish to breeze through their schedule, this three star facility provides what “Starbucks” gives you but with “luxury” says Rotana. The facility has been designed keeping in mind the need to be trendy yet quick.

With IT features that are a must for today’s globetrotting businessmen, this product aims to capture the growing appetite for affordable luxury.

Working in unison with the airline industry, the Dubai airport and DTCM has also opened various avenues for Rotana.

“We work in tandem with them and they have helped us to open up the South American market. We also participated in business sales trips and road shows in markets where we have never been before. We have been to China, Poland, The Czech Republic and Italy among others,” officials say.

The efforts have earned the group contracts and businesses that will bring them daily occupancies. The initiatives have been made to set up a platform in these countries and then build on them by means of marketing and representative offices as well as sales efforts.

With close to 3,500 rooms being managed everyday in Dubai alone, the group says that it stands in an advantageous position. Rotana claims to be the only hotel management company that manages these many rooms from a centralized sales and marketing office, giving the person who walks into the company the possibility to chose from an array of products including fivestar, four-star, three star beach as well as city hotels.

Despite branching into other geographical sectors of which UK, Germany, Russia and the US form part of the

20 BANKING AND BUSINESS REVIEW

Despite branching into other geographical sectors, of which UK, Germany, Russia and the US form part of the feeder market, the GCC still remains top priority for Rotana feeder market, the GCC still remains top priority. The group maintains that Dubai remains one of the best leisure destinations in Middle East and also now with the increasing inventory capacity, the range to choose from has widened.

Capitalising on the new found urge to shed its image as an “expensive destination” what needs to be effected is a rationalization of rates, believes Rotana. So will the rates soften further?

“Positioning the city at an average rate of Dh1,000 or Dh 400 was overpriced. I think if you look at the trends globally, we should lose close to 30 per cent of our average rates on an annual level, which includes our low and high rates and that will help us bring the city back on track where a lot more people will be able to afford to come here,” Darkazally argues.

How then does the group plan to stave off competition through price wars? Sounding confident of Rotana’s service quality, Darkazally says that the diversity of the products that the group offers within the city is its USP. Offering customers the choice to compare rates at the group’s hotels and to be able to make a more informed decision is one such step that the group has taken. Keeping track of where the customer spends his money is also another tool to measure where the hotel needs to concentrate its efforts on. This has helped them to make such items free for their customers without any hidden costs. So the room rate is all that the customer pays for and nothing else.

For families staying at Rotana, a free breakfast comes complementary.

But for businessmen who wish to stay connected during their stay, the high speed internet facilities have been made free. In case of corporate clients who use the hotel for conferences and other needs, the recession has played a dampener in terms of cutting down on

November 2009

the number of such events that are being hosted. But when it comes to footing the bill, Rotana says it is flexible enough to allow client who have been associated with the group for a long time the time to pay the bills, if they have trouble paying upfront. Rotana says that being “friendly” is the key to doing business for them.

With the crisis affecting the banking industry, Rotana believes that joining hands with its banking partners has helped for projects like co-branding to “create a constant visibility”. So joint marketing strategies have also been a part of the group’s measures in moving forward.

“We went out to our end-customers with co-branded messages with the Standard Chartered Bank, Abu Dhabi Commercial bank, Dubai First and so and they were all successful. During the final assessment, it is not just about how much money we make, but we are also focusing on finding the right market exposure and also the impression that we have been able to make in the marketplace,” Darkazally elaborates.

Conceding that the corporate segment has been hit, Rotana is hopeful that the fourth quarter results will be better. The group has had to “replace the deficits in the corporate segments into other segments”. The narrowing timeframe for booking is also not making things easy. With the emerging trend of massive online activity for bookings, Rotana is directing its attention towards the online market.

Advising the industry to adapt a positive outlook for the future, Rotana believes that it will be imperative for hotels to look at their individual distribution channels and find new means to market themselves. The group says that it remains undeterred by the crisis and the coming year will see more hotel openings and aggressive marketing activities.

BANK ING

GRIM NUMBERS Bad debts eat into banking sector profitability

A

significant increase in the need for provisioning to take care of huge bad debts, a similar rise in non-performing assets, slow growth in the loan portfolios and continued difficulties posed by the financial crisis are undermining the performance of UAE banks, many of which have already reported considerably negative third quarter results.

According to analysts, the struggle for the banks would continue until at least the middle of next year, provided the industry is spared of any further

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shocks. Any new bad news would further complicate the recovery path.

The large exposure of many UAE banks to the Saudi Al Gosaibi and Saad Group problem came as a double whammy as the banks were already struggling to cope with the effect of the global financial crisis as well as the all-encompassing real estate bubble. The fact that Abu Dhabi Commercial Bank (ADCB) has had to book as much as Dh810 million in bad-loan Similarly, National Bank of Abu Dhabi (NBAD had to set aside Dh284 million.

November 2009

Rating agencies see the banks ‘being highly challenged’ by the mounting bad debts throughout 2010, as these debts will consume the profits and the capital adequacy ratios of local institutions. According to them, the full impact of the crisis may still have not been felt.

Fitch Ratings downgraded the Longterm Issuer Default Ratings (IDR) of seven UAE-based financial institutions reflecting the agency’s view that the ability of the sovereign UAE Federal Authorities and the Emirate of Dubai to provide support has lessened.

The institutions named as affected are Bank of Sharjah, Commercial Bank of Dubai, Dubai Bank, Emirates Bank International, Mashreqbank, National Bank of Ras Al-Khaimah and Tamweel.

At the same time, the Support ratings for four of these institutions have been downgraded to ‘2’ from ‘1’.

Fitch has reviewed the sources of support provided to the UAE banking sector over the past year by both the UAE Federal Authorities and individual emirates.

The review also considered the ability and willingness of these support providers to continue to provide support if necessary.

Fitch concluded that the willingness to provide support for most institutions is unchanged, but said the ability of the federal authorities as well as the Dubai government to provide support has weakened, prompting the negative rating actions.

At the same time, Fitch affirmed the ratings of Abu Dhabi Islamic Bank, First Gulf Bank , National Bank of Abu Dhabi and Union National Bank following direct support provided by the Emirate of Abu Dhabi to them.

A closer look at the third quarter results of some of the banks follows:

National Bank of Abu Dhabi NBAD reported solid third quarter net profit of Dh914 million (40.5 per cent higher year on year) beating market consensus of Dh817 million. The bank recorded its highest quarterly revenue ever of Dh1.7 billion, helped by continued growth in interest income and also stabilization in the non funded business.

While loans have grown by 14.7 per cent since the end of 2008, revenues in 2009 grew by 21.3 per cent, helped primarily by a 36.7 per cent rise in interest income.

The bank was able to expand 2009 margins to 2.77 per cent, compared to 2.61 per cent in 2008.

The loan base expanded slower than the second quarter, with the loan book growing by Dh3.9 billion in the third quarter (+3.2 per cent) versus the Dh8.4 billion growth seen in the second quarter. The big surprise was in the customer

The large exposure of many UAE banks to the Saudi Al Gosaibi and Saad Group problem came as a double whammy as the banks were already struggling to cope with the global financial crisis and the real estate bubble deposit base shrinking by Dh1.1 billion, but this was expected following the stronger then estimated growth in the second quarter of Dh13.8 billion.

Provisioning levels were maintained as NPLs rose slightly, with third quarter provisions remaining flat on a quarterly basis at Dh284 million, but up by 59 per cent on yearly basis While absolute NPLs rose markedly by Dh218 million in the third quarter vs. Dh76 million in the second, the NPL ratio only rose to 1.2 per cent from 1.06 per cent. Analysts estimate that the loan loss coverage ratio dropped slightly to a still healthy 146.3 per cent.

The bank had previously disclosed mini-

mal Saad and Gosaibi exposures totaling $10.9 million.

The bank continued investment in people, network and infrastructure recording a Dh56 million cost increase (+35 per cent year on year and +13 per cent quarter to quarter). The cost efficiency ratio weakened to 28.8 per cent from 26.5 per cent in Q2, but is still in line with the bank’s guideline of 30 per cent and below.

NBAD continues its prudent provisioning level and together with improvements in the revenue base and according to Al Mal Capital, the bank is in line to handsomely beat its full year net income

BANKING AND BUSINESS REVIEW

November 2009 23

forecast of Dh2.9 billion. Its analysts say the fear of a rise in NPLs has not disappeared.

Abu Dhabi Commercial Bank ADCB reported third quarter profits of Dh44 million (-85.4 per cent quarterly and -89.5 per cent on an annual basis) driven down by provisions of Dh810 million compared to Dh312 million in the third quarter of 2008 and Dh613 million in the second quarter of this year. Rev-

enues have risen by 8.7 per cent but the mix has shifted and interest income now makes up 68 per cent of revenues, vs. 54 per cent in 2008.

While ADCB has been able to raise margins to 2.42 per cent (2.2 per cent in 2008) and grow their loan book by 9.65 per cent in 2009, the non-funded business is feeling weakness (down 23 per cent year on year) due to lower volumes across wholesale and consumer banking.

Loans/Deposit ratio weakened further to 143 per cent from129 per cent at the end of the second quarter.

But the most important story, according to analysts, is on the provisions side of the bank’s business. In its bond disclosure dated September 27, 2009 the bank had disclosed exposures (net of collateral) to the Saad and Gosaibi groups of Dh2.24 billion, of which only 19 per cent (Dh430 million) was provisioned for. While the Saudi exposures account

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Fitch Ratings downgraded the ratings of seven UAE-based financial institutions reflecting the agency’s view about the prospects of support for the increase in NPLs (4.2 per cent with and 2.6 per cent without the Saudi exposure) excluding the Saudis there was an estimated additional Dh755 million in new non-performing loans in the third quarter alone. The bank has 60 per cent of its loan book exposed to the Abu Dhabi market, with a majority of the remaining in Dubai.

With the real estate correction in Dubai and continued rise in NPL’s (besides the Saudi exposure), analysts believe NPLs will continue to rise and along with it the commensurate provisioning.

Loan loss coverage ratio has weakened considerably to 52.3 per cent as of the third quarter, with the Saudi exposures and 70.7 per cent without. Analysts say future results could continue to be impacted negatively by continued reserve building. The one silver lining could, however, be recent moves by the Gosaibi group to reach a settlement with UAE banks and hope that the Saad groups overtures to Saudi banks will be mimicked in the UAE, although the timing and likelihood are unknown, analysts point out.

Emirates NBD Emirates NBD announced its ninemonths net profit of Dh3,164 million, showing a decline of 14 per cent year on year in profitability while on a quarterly basis, figures for the third quarter increased 3 per cent year on year. The numbers have been seriously bogged down by high NPLs, outlining an improving trajectory in the bank’s core performance.

The net interest income showed a 32 per cent rise (including net income from

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Islamic financings) while quarterly NII escalated by a noteworthy 8 per cent on quarterly basis. While loans grew 0.2 per cent, they had little to contribute to the improving NII. The rise in the NII comes from a confluence of factors which include a decline in the cost of funds and the benefit arising from the placement of the Dh4 billion Tier-I securities (as issued by the Investment Corporation of Dubai).

Analysts calculate that the spreads of the bank have increased from 2.7 per cent in the third quarter of last year to 3 per cent in the comparable period this year.

ENBD’s non-interest income also exhibited a drop of 17 per cent year on year for the third quarter; however, on a quarterly basis, non-interest income improved 19 per cent. Fee & commission income was down 16 per cent as a result of a decline in new underwritings and in trade financing activity. The bank reported a loss of Dh2.5 million for the third quarter, emanating from its associates and joint ventures. The bank fared well in terms of favourable re-pricing of its investments in the second and third quarters.

Despite a 14 per cent rise in its total income in the third quater, the bank reported declining profitability due to the heavy provisioning during the period under review. The asset quality saw further deterioration, as the NPLs ratio increased from 1.56 per cent in the second quarter to 1.88 in the third. As per the management, asset deterioration came from both the corporate and the consumer side. Increase in the delinquency was, however, within the bank’s expectations, which anticipates the NPLs ratio to rise further to 2 per cent by end of 2009 and 2.5 per cent in the first half of next year. The bank also stated that it has provided adequately for the Saudi conglomerates that defaulted earlier in the year.

Overall, analysts consider most of the key performance indicators for ENBD as healthy and robust, portraying some positivity for upcoming quarter. On the

flip side, a further decline in asset quality and an anticipated decline in spreads (to normalized levels) may eat into the profitability, they feel.

Mashreqbank Mashreqbank reported that its net profit for the first nine months was Dh1.12 billion. Net income for the nine months declined 26 per cent year-on-year, which the bank attributed to prudent financial management, leading to increased provisions for loans, advances and other financial assets to Dh1.4 billion.

“Whilst net profits are below those recorded for the equivalent period last year, this is largely due to our ongoing policy of prudent financial management,” Mashreqbank chief executive Abdulaziz Al Ghurair said.

Assets rose 7 per cent through the period to reach Dh99.9 billion, while deposits increased 19 per cent to Dh61 billion, according to the statement.

Loans and advances, including Islamic financing, were down 9.5 per cent, “enabling the bank to achieve a very comfortable advances-to-deposit ratio of 82%,”the lender added. The bank said its total capital adequacy ratio is at 21 per cent and Tier-1 Capital ratio at 15 per cent.

Analysts calculate that the third quarter net profit fell 42 per cent to Dh201.1 million from Dh364.3 million in the corresponding period last year.

Mashreq has filed a court case against Saudi group Ahmad Hamad Algosaibi & Bros (AHAB) to claim Dh1.46 billion owed by the group. The bank said the amount included the $225 million it seeks to recover from AHAB in a law suit filed in New York. The Algosaibi family conglomerate has in turn filed a law suit in New York against Mashreqbank and Maan al-Sanea, head of Saudi Arabia’s Saad Group, seeking combined damages of more than $2 billion.

Dubai Islamic Bank Dubai Islamic Bank reported a net profit of Dh1.12 billion for the first nine months of 2009, continuing the trend of positive performance in the year to date. DIB made impairment provisions of Dh403

million for the same period, impacting its net profitability.

The bank’s total assets as of September 30, 2009, stood at Dh82.9 billion, while customer deposits reached Dh66.1 billion in the same period.

According to the bank, the figures reflect the continued strength and appeal of DIB during a period of sustained expansion of the bank’s retail banking services and channels through its bricksand-mortar branch network, which is targeted to reach a total of 64 nationwide branches by the end of this year. The bank has already opened six new branches in 2009.

At the end of the third quarter of 2009, DIB’s investing and financing assets stood at Dh50.3 billion, while the bank’s financing-to-deposit ratio stood at 76 per cent as of September 30, 2009, reflecting its sensible credit approach

ity, but analysts see a remarkable uplift in the bottom-line on a quarterly basis. The third quarter results were higher by 9 per cent year on year , signaling a marked improvement. This was led by the net interest income which grew 31 per cent over the third quarter last year. However the growth was somewhat stagnant on quarterly basis with a marginal improvement of 3 per cent.

FGB’s non-interest income for the quarter, is calculated to be approximately Dh700 million, which contributed 42 per cent of the total operating income. While banking fees and commissions seem to be in line with previous quarters, significantly high figures for FX & investment income and for other income have led analysts to believe that one-off items may have had played a major role in burgeoning non-interest income. FX & investment income and other income for the

Rating agencies see the banks ‘being highly challenged’ by the mounting bad debts throughout 2010, as these debts will consume profits and capital adequacy ratios and strong liquidity position, which has enabled DIB to expand its retail credit.

As further evidence of the bank’s strong liquidity position, earlier this year, DIB bought back its sukuk amounting to $50.6 million through a cash tender offer to its sukuk holders.

On the regional front, the bank announced in the third quarter of this year that Jordan Dubai Islamic Bank (JDIB) has received a preliminary banking licence from the Central Bank of Jordan to operate as an Islamic financial institution, and that it will begin operations with a share capital of $100 million. JDIB is expected to open its first branch in the first quarter of next year.

First Gulf Bank First Gulf Bank reported a net profit of Dh2,456 million for the first nine months. The results exhibit an improvement of 5 per cent year on year profitabil-

quarter are approximated to be in the vicinity of Dh180 million and Dh220 million respectively, strikingly higher than the mid-double digit figures reported in the first two quarters of the current year.

The bank took very high provisions once again, standing at Dh490 million for the quarter, after taking provisions amounting to Dh220 million and Dh260 million in the first two quarters of 2009, respectively. This includes the provisions taken for the troubled Saad and al-Gosaibi groups. According to the bank, its exposure to these groups stands at $104 million (approx. Dh382 million).

Analysts feel that since the bank has booked Dh70 million in total over the second quarter and the third quarter in provisions related to the Saudi groups, the source of the remaining provisions is a cause of concern. FGB plans to take an additional Dh174 million in provisions over the next 5 quarters, (roughly Dh35 million per quarter) to adequately provide for the Saudi conglomerates. Cur-

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rently, the bank’s NPLs to gross loans ratio stands at 2.1 per cent, as against 1.8 per cent reported in the second quarter, while the coverage ratio stood at a comfortable 153 per cent (down from 165 per cent in the second quarter).

FGB’s assets grew 16 per cent YTD while its loans disbursement remained in check with a lower 13 per cent rise. Since the bank’s deposits rose 21 per cent, its Loans to deposits ratio improved further from 107 per cent in 2008 and 103 per cent in the first half to 101 per cent in the three quarters. Capital adequacy stood at 18.8 per cent (22.8 per cent post conversion of Dh.5 billion Tier II capital) for the nine months period.

RAKBank RAKBANK reported a net profit of Dh530.66 million for the nine months, reflecting a 10.40 per cent increase compared to the same period last year. The bank said it continued to register growth in its chosen segments of small business finance, personal loans, mortgages and credit cards.

Over the nine-month period, the bank’s net interest income at Dh850.87 million increased by 32 per cent compared to the same time last year. Gross Loans and advances stood at Dh13.17 billion, a 17 per cent increase over the nine month period and a 23 per cent increase over the same time last year.

The capital adequacy ratio stood at 15.05 per cent, against a minimum of 11 per cent mandated by the Central Bank.

The bank said the ratio would be boosted to 20 per cent once deposits received from the Ministry of Finance are included in the calculation upon completion of legal formalities. The advances to deposits ratio stood at a comfortable 93.6 per cent as per the UAE Central Bank calculations.

The bank has set aside Dh167 million for impaired loans for the nine month period. Fee, commission and other income at Dh390 million was up by 11 per cent compared to the same time last year.

Total assets stood at Dh16.38 billion, an 18 per cent increase from year-end 2008, and 20 per cent higher than the same period last year. The main growth in assets was seen in loans and advances.

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During the year, investments totaling Dh209 million matured leaving an outstanding portfolio of Dh560 million at the end of September. The bank said the growth in the asset book has been supported by a combination of increase in customer deposits and shareholders’ equity. Customer deposits were up by Dh2.64 billion over the nine month period due to a combination of term and transaction deposits. Total shareholder’s Equity stood at Dh2.61 billion.

Abu Dhabi Islamic Bank Abu Dhabi Islamic Bank announced a net income of Dh701.3 million for the nine months, down 4.8 per cent from Dh736.7 million in the same period of 2008. On a quarterly basis, the bank reported a profit of Dh239.5 million in the third quarter, up by 11 per cent from Dh216.5 million in 3Q2008.

The lower earnings have been attributed to an increase in provisions and lower investment income. Provisions during the nine months amounted to

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Dh385.9 million, of which Dh121.5 million was taken in the third quarter. In addition, ADIB’s real estate subsidiary Burooj, saw lower investment income, down

by Dh244 million for the nine months.

Net revenue from funding witnessed an impressive rise to close at Dh1.6 billion in the nine months, up by 25.2 per cent from Dh1.3 billion rom the same period in 2008.

Total assets increased by 14.6 per cent to reach Dh58.7 billion in the nine months from Dh51.2 billion at the end of 2008. In the same period, financing assets also increased to Dh39.2 billion, up by 14.7 per cent from Dh34.2 billion in 2008. Customer deposits increased by 17.4 per cent, from Dh37.5 billion in 2008 to Dh 44 billion, in the nine months under review.

Capital Adequacy Ratio (CAR) (excluding government deposits) stood at 15.48 per cent and the bank is still in the process of converting Dh2.2 billion f government deposits into tier II capital.

After this process, the CAR is expected to reach 20.3 per cent. The size of ADIB’s exposure to Saad & Al- Ghosiabi is still not known.

C OPING UP

Tryst with luxury Card companies target market’s upper end to keep business going

By Ambily Vijaykumar

E

xpenditure cuts have become the norm, whether it is households or businesses since the economic crisis began. Finding a customer segment that remains comparatively unaffected by the global dip in fortunes is what forced transactions company MasterCard to look into the global affluent segment of customers.

MasterCard says that the growth potential in this segment is immense. With specific focus on the Middle East, there is 14 times more growth space in the card business here when compared to the European market. A large portion of this growth is set to be driven by the affluent customer. MasterCard in-house studies suggest that by 2017, Russia would account for one-third of the global luxury sales.

With the crisis entering its second year, consumer spending is yet to pick up and those who are spending are being cautious. So why does MasterCard think that the affluent segment holds growth potential? “We see an upward growth of over 30

Affluent customers are also easy to identify, and they share common needs, behaviour and attitudes; they are also more optimistic Jim Carrington

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per cent in this region for us and the affluent customers will drive much of this growth. The reason is that businesses consider affluent customers to be a better target from the spending point of view and being a spend-transaction-commerce oriented company, we find their relative value to be great,” says James E Carrington, Group Executive, Global Consumer Credit Products, MasterCard Worldwide.

Affluent customers are also easy to identify, and they share common needs, behaviour and attitudes. But what makes them a very good target is that “they are more optimistic,” says MasterCard. The assumption is backed by second quarter results for 2009 for their Titanium card in the APMEA (Asia Pacific, Middle East and Africa) region. The company has registered a 49 per cent growth in Q2 this year as compared to the same quarter in the previous year.

From the point of view of a card issuer, which has a day to day relationship with the consumer, it is easier to identify who these customers are. It enables issuers and transaction companies like MasterCard then to target their products and marketing activities towards the affluent segment.

With credit default rates shooting over the roof, the high net worth client is seen to be more consistent and hence seen as a “good bet” for issuers. Since the affluent customers are not seen to use a credit card as a “credit vehicle” but as a means to spend and transact, MasterCard says that it sees strong opportunity for issuers to build their brands by having a plastic that comes out at every transaction and makes a statement about their financial institution or their private bank or any part of the business that they want to promote.

Another statistic that throws light on the potential of this segment in the Middle East is that despite the economic crisis, in the APMEA region, brands like Louis Vuitton, Gucci and Hermes have shown growth of four, 25 and 30 per cent respectively.

Emerging from this trend then is the chance to exploit the premium card holder’s requirements for “exceptional service, personalisation and customiza-

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Despite the economic crisis, brands like Louis Vuitton, Gucci and Hermes have shown growth of four, 25 and 30 per cent respectively tion, preferential access and treatment and recognition and exclusivity”.

“Without question customers in this segment want the right service at the right time and if one can bring in technology in time, it is better for them. In terms of rewards they are looking for the option to select benefits that are relevant to them. But that is not all, how the benefits are delivered to them is also equally important. So it is no longer a case of entitlement for benefits but more of wanting special treatment. And finally they want something that is just more than the standard rebate, they are looking for something that they feel is critical,” explains James E Carrington.

A crucial feedback that issuers are sending back to transaction companies is that customers are looking for cards that work. Not only are they looking for secure transaction but also a globally recognized brand that does not give them a negative experience of not being valid when they travel to other destinations.

From an issuers’ perspective, the affluent customer carries a bigger mortgage, nicer cars, bigger balances and large investments. In terms of overall value, they are very good for any bank. From a merchant leveraging point of view, Middle East has a good number of these opportunities to build around. MasterCard has already co-branded with Saks Fifth Avenue in the region for the customers of the brand. In Japan, for instance, the partnership is with automakers Porsche.

The transaction company says that these kinds of partnerships are essential to

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“stimulate commerce”.

MasterCard says they already have cards targeting this segment. Their Gold, Platinum and World cards are a case in point. Emphasising on the experiential benefits that elite customers prefer, Porush Singh, Vice President, Credit Product Development, APMEA Region says, “Our premium card holders are looking for exclusive experience. So, for instance, they get access to the Marhaba lounges at the airport, card holders in Saudi Arabia get a Rolls Royce drop off and pick up or the diamond-studded credit card that gives preferential access to the Burj Al Arab.”

Apart from that, there is also leveraging to be done for various sporting and entertainment events like the Dubai Desert Classic, The Jazz Festival. To leverage off the luxury segment, fashion shows are also being used as a means to increase presence.

“We are able to leverage these approaches and tie them together to bring to the affluent community the things they would want and would speak of the way they live and spend,” says Porush Singh.

Two other segments also offer great growth potential for the affluent customers. “One is the e-commerce world and the other the mobile market since they will guide the future of transactions,” says James Carrington. Luxury partners in the US and Europe have been hit, but the Middle East is better placed and so MasterCard says that it is the right market to be creative and make “relevant value propositions”.

FOCUS

Moment of truth Banks are in a fight for their lives, says Accenture

C

ustomer behaviors, attitudes and preferences have been forcibly altered by the economic downturn, and a new customer math—and a new success formula to master it—are fast emerging, an Accenture study of the banking industry reveals.

A recent Accenture survey of US banking customers estimates that as much as 30 per cent of a bank’s customer base today is vulnerable. To seize the opportunity of so many customers

in flux, banks must commit the time, talent and money to adjust their game plan to these new external and internal realities through actionable customer segmentation, sophisticated pricing, flexible solutions that meet changing needs and differentiated digital marketing capabilities, says Accenture By tightly aligning and integrating their offerings to retain and acquire customers, banks can unlock organic growth and operating efficiencies in parallel, it says.

According to the study, in the history of banking, there has never been a more important time to focus on the customer. The global banking landscape has been forever changed by the credit crisis, leaving issues of trust, customer attrition, brand loyalty and the resulting revenue declines trailing in its wake.

While banks are marshalling resources to raise capital and cut costs where possible, they must not overlook their lifeblood: ongoing acquisition and retention of customers, Accenture suggests.

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“These actions also can help lay the groundwork for a broader operating model transformation to grow and sustain profitably long term. But right now, as the banking industry moves from a product-driven model to a customer demand-driven one, focusing on understanding and engaging the “new” customer has to be a priority. For the banks that act now, a return to high performance can follow”.

The study suggests that re-establishing the customer trust and loyalty once considered a given in bank customer relationships must become the foundation for a new business model. The financial downturn, generational changes, technological advances and competitive factors have all combined to challenge the “trust capital” once taken for granted.

“For banking leadership, this is a moment of truth in which the greatest risk is inaction. The new global consumer mindset is setting the stage for change. Needs, attitudes and behaviors are on the move. This represents a golden opportunity for banks to refocus the attention and resources necessary to align offerings and interactions to match that mindset among their most valuable customers.”

With up to 30 per cent of a typical bank’s customers remaining “in play,” meaning these customers may change their banking relationships or change the amount and nature of their consumption as they seek to preserve their financial well being, Accenture points out.

Faced with a shrinking pie and potentially unfavorable shifts in the mix of revenue and margins, it is clear banks need to act to: a) keep their best customers and b) selectively gain share by attracting the disenfranchised.

The question for chief executives becomes how, given three major complications: • Scarcity of time, money and talent • Ongoing waves of change that keep moving the target • Coordination of customer actions across the organization The study says that the ripple effects of the credit crunch—lost jobs, consumer confidence, homes and savings—have combined to dislocate con-

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The global banking landscape has been forever changed by the credit crisis, leaving issues of trust, customer attrition, brand loyalty and the resulting revenue declines trailing in its wake sumer needs and behaviors and force a realignment of financial priorities.

These new realities have created a new customer math for banks and the need for new revenue.

Banks that act quickly, efficiently and at scale to apply tailored treatments stand the best chance of retaining customers and gaining those put at risk by competitors. Success on this front is predicated on the bank operating and acting in unison. One such “persona” is the mid-to upper income “Householder”. Customers with this persona seek to maximize their financial assets by moving portions to safer havens in uncertain times. They show a high degree of financial self-direction and have a preference for in-person advice when

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researching purchases, though the actual transaction may be done online.

They are brand loyal and value quality and tailored products and services over price.

By identifying its four or five key customer personas, a bank can first assess those that are most at risk or present the best opportunities and then determine which segments to focus its top talent and resources on, thus driving appropriate action and attention to the highestvalue sectors, the study recommends.

However, banks must also keep in mind that their customers’ attitudes are not static. Throughout the relationship lifecycle between customer and bank there are always relevant “moments of truth” when customers may change

their attitudes or behaviors according to shifting context or need. To capture such opportunities, banks have to setup a proactive contact management system that can respond when the needle on the relationship lifecycle moves.

Deutsche Bank and National Australia Bank both provide good examples here.

Each of these leading banks has developed a state-of-the art triggering engine to support those on the front line in the identification of specific customer events that represent important sales or service opportunities.

Priority customer needs Once a bank has developed a stronger understanding of its customer, it can respond to the changed needs created by the current crisis with innovative treatments—product and service solutions, pricing and marketing campaigns— coordinated across the organization to deliver tailored offerings that fit the new customer realities.

Accenture says the key is for banks to integrate such mobilization with a renewed emphasis on customer advocacy. Intuitive, relevant and compelling treatments can not only boost the loyalty of existing customers, but also can increase the effectiveness of a bank’s marketing to prospective customers.

For instance, in the “Householder” persona the banking experience needs to combine easy to- use online features supplemented by trusted relationship building during face-to-face interactions.

The goal is to optimize selling and support services for Householders through tailored deposit or investment products online as well as sell-on potential for higher-margin advisory services in person.

Two factors are of particular importance in helping banks devise the most profitable tailored treatments. The first is enabling customer-facing sales and service representatives in identifying customer needs and attitudes.

By elevating people’s skills and capabilities, banks can enhance their autonomy and ability to identify the best

Banks that act quickly, efficiently and at scale to apply tailored treatments stand the best chance of retaining customers and gaining those put at risk by competitors solution for each customer’s needs. A good illustration of this can be seen in Barclays’ “Way Ahead” program in which the bank identifies six imperatives that its employees should apply to better meet customer needs, Accenture points out. Another is Royal Bank of Scotland’s “Money Sense”, a program the bank developed to improve employees’ financial skills and competencies through a specific training regime with the broader aim of providing in-branch financial advice to anyone that wants it—including customers of other banks and those without bank accounts.

The second factor, according to the report, is sophisticated pricing tools.

New technologies can enable banks to model and balance the tradeoffs in different offer combinations to find the

ones that provide the most compelling benefits for specific personas without sacrificing margin. Advanced pricing capabilities also can help banks steer clear of simplistic and costly incentives—such as cutting or eliminating fees, reducing interest rates on loans or giving higher rates on savings accounts and CDs. While such actions may result in a short-term reduction in churn or a lift in new customers, they do so at the expense of margin and so are unsustainable over the long term. For example, a bank implementing a major credit card re-pricing initiative may adversely impact its depositor relationships.

Having created innovative treatments for its target customer personas, a bank can then focus on delivering those treatments through the right mix of

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channels—those preferred by each persona and profitable for banks, says the study. For some customers, the branch will always be the primary business venue, but the proportion of consumers who prefer the Internet for most interactions is growing. By understanding how each persona wants to do business and tailoring interactions accordingly, banks not only can strengthen customer loyalty but also reduce product and service delivery costs.

Accenture says Internet also can be a powerful tool for attracting and building loyalty among new customers through targeted marketing programs.

Today’s new Web 2.0 capabilities—such as social networking, blogs and online comparative tools—present new opportunities for forward-thinking banks to reach specific targets or segments more efficiently and forge stronger relationships with customers in those segments by, for example, creating a virtual community in which a specific persona or customer segment can congregate, interact and discuss common issues.

To ensure new customer initiatives are achieving the desired effects, banks must implement comparable metrics, particularly in the key benchmarks of customer attrition, revenue velocity and revenue volume. If a bank invests in a more customer-centric approach, it needs to know which elements of the customer experience are having the greatest impact on loyalty, satisfaction, profitability and growth.

As it implements improved metrics, a bank must determine whether to use them at the individual customer level or the broader persona level—a decision that largely hinges on the bank’s resources and competitive situation. A bank then must decide how frequently to measure results— quarterly or even monthly—and to what degree of detail.

By doing so, it can alter course quickly in response to rapid changes in market conditions, segments or customer demands.

Developing the right set of key performance indicators (KPIs) is also important. KPIs that gauge long term performance drivers like loyalty, rather

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Without decisive action on the customer front, banks may find themselves winning the battle only to lose the war than short-term biases such as crossselling, can foster a stronger customer orientation and spread it throughout the organization. In this vein, Royal Bank of Canada launched a tailored automatic overdraft protection policy targeted to ensure long-run relationships in lieu of immediate revenue gains. Under the policy, after 90 days, any checking customer with at least one deposit and a low credit-risk score received overdraft protection customized to their profile.

The policy has not only improved the customer experience and reduced the bank’s bad check handling costs but it has also led to a 13 percent increase in average profit per checking client and a 20 percent increase in high-value clients in just five years.

Accenture says many banks are in a fight for their lives. They need to move fast to cut costs and find new sources of capital to live to fight another day. But without decisive action on the customer front, banks may find themselves winning the battle only to lose the war. To

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the extent the industry is shifting from a supply-side, product-driven world to a demand driven one, the driver of this new model is the customer.

Still, once a renewed customerfocused strategy is in place, banks will find the harder work begins. The dramatic changes to the global marketplace broadly and customer behavior specifically have changed the playing field for good and banks must rethink and restructure their operating models to adapt to and align with the new reality.

Banks must follow the four steps today to differentiate themselves by reshaping their business model on renewed customer expectations, with the aim of delivering a truly innovative customer experience tomorrow.

“Lesson from the last recession: winners grasp the challenges of the moment as an opportunity to improve market share, make bold decisions and create both structural and operational advantages to become the high performance banks of the future”.

RE AL ESTATE

Some light, finally Confidence levels are increasing across the region, says JLL

T

enants and occupiers of commercial real estate across the MENA region are now beginning to awake from the period of inactivity, with improved sentiment reflecting a consensus that the worst of the downturn has past and now is the time to be repositioning themselves to benefit from the forthcoming recovery, Jones Lang LaSalle (JLL) says in its house view of the regional markets.

The two factors have been identified as an increase in confidence level and the fall in rentals across the region.

There has been a clear improvement in business confidence as economies across the region move onto a more positive footing. Strong performance indicators such as oil prices and equity markets have led to positive revisions in forecasts of economic activity. In the latest such revision, the IMF has increased its 2010 economic growth forecast for the Middle East region to +4.2 per cent, a half per cent forecast increase from its July estimate, JLL points out.

On the other hand, rentals have fallen significantly in some MENA cities (most notably Dubai) as markets have moved increasingly in favour of tenants and occupiers, resulting in competi-

tively priced office space being available. Dubai’s position as MENA’s most competitive market is reinforced by the significant reduction in rentals as well as continued confidence in the cities long term prospects, it says.

According to JLL, the improvement in occupier sentiment is being reflected in an increase in the level of active and potential tenant demand in the marketplace. JLL says its research shows that active and potential demand in Dubai alone now stands at over 1.5 million sq ft. This has increased ten fold since April 2009 and now stands around three times the level of active demand in the Dubai market one year ago.

Much of this demand is for immediately available space, preferably with a previous tenant fit out in place making a relocation ‘cost-neutral’. The majority

of demand is for units of less than 20,000 sq ft, although there remain some active enquiries for much larger areas, the report points out. According the analysts, the most active segments of the market include financial services, FMCG companies, professional dervices, energy companies and the healthcare sector.

According to JLL, in the worst affected markets, rents have adjusted to the level where tenants and occupiers are prepared to take a risk on a further decline, particularly for well specified product in prime locations where some selective shortages are now occurring.

This is allowing tenants and occupiers the opportunity to trade up to better quality space while still achieving a ‘cash neutral’ position.

Many tenants and occupiers are seeking to take advantage of the availability

Rentals have fallen significantly in some MENA cities, most notably Dubai, as markets have moved increasingly in favour of tenants and occupiers, resulting in competitively priced office space being available

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of fitted out space to reduce their relocation costs. Others are merging operations from multiple locations into a single, better quality facility at a similar or lower rent than they were previously paying.

There is clearly a ‘lag’ period between improving sentiment and actual market activity i.e. deals done. There is, however, clear evidence that the weight of transactions has increased over Q3 and we foresee a continuation of this trend moving forward. It is clear that a significant component of corporate demand in the MENA region will continue to come from large multi-national businesses, the report points out.

With almost all the Fortune Top 500 companies now represented in the region, most of the growth from this sector will come from the expansion of existing occupiers rather than new entrants to the market. Jones Lang LaSalle research indicates 75 per cent of this group of major overseas multinationals currently has representation in the region, particularly cities such as Dubai, Abu Dhabi, Riyadh and Cairo.

Another sector of the market that has been somewhat overlooked in the MENA region in the past, according to JLL, is small and medium sized businesses (SMEs). Although multi national companies (MNCs) may have the largest employment on a per company basis – employing upwards of 300+ employees, the number of SMEs that employ 20-100 people creates an overall larger employment base. In Hong Kong for example, 40 per cent of employment is attributable to MNCs while 60 per cent is attributable to SMEs, with 98 per cent of total business establishments being part of the SME sector.

In planning for the global economic recovery, governments across MENA are recognising the importance of creating an environment within which these companies can flourish and develop.

This will be one of the most important factors to increase employment and therefore occupancies in office markets across the region, JLL says.

Office markets in MENA have been defined by low vacancy rates and a shortage of good quality space. The next few years are likely to witness an increase in

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In the worst affected markets, rents have adjusted to the level where tenants and occupiers are prepared to take a risk on a further decline, particularly for well specified products in prime locations both the quality and quantity of space being offered to occupiers, with the development of multiple sub-markets and new office formats including mid to low rise business parks in addition to high rise CBD space, the report points out.

Leading trends identified by JLL include a shift from larger to smaller deals (less than 10,000 sq ft); shift from investors to tenants and occupiers; shift from pre-lets to existing buildings; shift from modest to highest quality buildings and a shift from short to longer term leases.

While landlords are not in a position to stimulate additional occupier demand at the level of the whole market – they can certainly influence, the pattern of

demand within any particular market.

Owners can proactively attract tenants in the increasingly competitive market conditions by providing incentives, JLL points out.

Looking ahead, JLL points out that with investors increasingly focused on assets offering secure long term income streams, tenant demand is a good leading indicator of potential investor demand, with improved tenant demand preceding increased investment activity by 6 – 12 months. The report concludes that markets with the greatest improvement in tenant demand would be the ones that are likely to attract the greatest investor demand.

The pointers Tenant and occupier sentiment has now reached a tipping point and has improved noticeably in the region over the past six months. Tenants and occupiers have recognised that favourable market conditions provide them with opportunities to take advantage of the new, competitive nature of the market.

Improved tenant and occupier sentiment has been reflected by a ten-fold increase in the level of active and potential demand in Dubai over the past six months. Though improved sentiment has yet to result in a significant increase in signed leasing activity, Jones Lang LaSalle expects this to occur within the next 6 – 12 months.

Recovery in demand will be uneven rather than uniform, with clear “winners and losers” in an increasingly forward-looking market focussed on location and quality. Despite increasing vacancy rates, a shortage of such stock is likely to remain.

Proactive owners will recognise the need to cater more closely to tenant and occupier demands. The strategies likely to be recommended are rent free periods and other leasing incentives, along with the provision of longer leases for major anchor tenants and occupiers. Some of the more innovative landlords may also offer finance packages to assist with the initial capital expenditure required for fit-outs.

An improvement in demand is a necessary prerequisite to attract long term investors to commercial markets in the MENA region. Jones Lang LaSalle expects strengthening tenant and occupier demand to convert into increased investor demand later in 2010 - which is shaping up to be the ‘vintage year’ in the current real estate market cycle.

November 2009

ISL AMIC FINANCE

Over $9b sukuk issues in nine months S&P attributes slow down to defaults, difficult market

N

ew issuance of sukuk topped $9.3 billion in the first seven months of 2009 compared with $11.1 billion during the same period in 2008, according to a report by Standard & Poor’s Ratings Services.

“The smaller amount of issuance was due not only to the still-challenging market conditions and drying up of liquidity, but also to the less-supportive economic environment in the Gulf Cooperation Council countries, particularly in the United Arab Emirates,” said Standard & Poor’s credit analyst Mohamed Damak. “The medium-term outlook for the sukuk market remains positive, though, in our view, given the strong pipeline--with sukuk announced

or being talked about in the market estimated at about $50 billion--and efforts to resolve the major difficulties impeding sukuk market development.”

Malaysia has taken the lead as the major country of issuance for sukuk, accounting for about 45 per cent of sukuk issuances in the first seven months of 2009. Issuers in the Kingdom of Saudi Arabia have contributed another 22 per cent of sukuk issued during the same period.

The default of a couple of sukuk was possibly partly responsible for the slowdown in issuance. The silver lining was that these defaults should provide the market with useful information on how sukuk will behave following default.

Major hurdles remain on the path to

sukuk market development, however, including: difficult market conditions, which are slowing the planned issuance of numerous sukuk; lack of standardization, notably when it comes to Shariah interpretation; and the low liquidity of the sukuk market, which constrains investors trying to exit the market in times of turbulence or access the market looking for distressed sellers, S&P said.

While the bond market continued to be active, Islamic equity market performance was disappointing. According to S&P’s latest Shariah Scorecard, Shariah-compliant stocks underperformed the broader market in the Gulf Cooperation Council, United States

BANKING AND BUSINESS REVIEW

November 2009

35

and Europe during the third quarter of 2009, as Islamic investors remained on the sidelines while the financial sector rallied.

The S&P Global BMI Shariah Index returned 15.46 per cent over the 3 months to September 30, 2009, as investors demonstrated renewed risk appetite for equities amid signs the global economy may be stabilising and bid financial stocks higher. The non-Shariah S&P Global BMI Index, which has a higher weighting towards financials, rose 18.67 per cent over the same period.

In the Gulf, returns from the S&P GCC Composite Shariah Index, comprised of 165 Shariah-compliant equities listed in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, slowed by more than half to 11.55 per cent from 27.65 per cent in the second quarter. The index marginally underperformed the S&P GCC Composite Index, which returned

36 BANKING AND BUSINESS REVIEW

While volatility is likely to remain a feature of global markets for some time, Shariah indicies and Islamic investing remains a growth story 12.82 per cent over the third quarter.

According to Alka Banerjee, Vice President, Standard & Poor’s Index Services, “Islamic banks and other financial institutions operating according to Shariah principles are continuing to underpin the performance of the S&P GCC Composite Shariah Index.

However, with limited exposure to financials outside of the Gulf, Shariah investors are now missing out on some of the upside as the global economy recovers.”

While volatility is likely to remain a feature of global markets for some time, Banerjee said Shariah indicies and Is-

November 2009

lamic investing remains a growth story, facilitating the launch of several new Islamic funds, Exchange Traded Funds and a new breed of Shariah-compliant structured products in the MENA region, London and New York during the third quarter.

S&P’s Global Benchmark Shariah Index Series covers 52 developed and emerging markets as well as ten GICS (Global Industry Classification Standard) sectors. It is part of S&P’s family of Shariah-compliant indices, designed to offer a comprehensive set of Islamic investment solutions for both benchmarking and investing activity.

New milestone

A milestone was established in Islamic finance when the International Finance Corporation, an affiliate of the World Bank, recently listed a Sukuk on the DIFC’s international exchange, Nasdaq-Dubai.

The IFC Hilal Sukuk is a dollar-denominated $100 million issue, AAA rated, with a five-year maturity.

While this is a symbolic amount compared to some of the mega-Sukuk, the Hilal Sukuk offered by the IFC sets a milestone for Islamic Finance and for financial markets in the GCC. It is the first time that a non-Islamic financial institution issues a Shariah-compliant security for term funding, a fact all the more important, considering that the IFC, the private sector arm of the World Bank, is a leading multilateral financial institution, founded in 1956, with a strong reputation on international markets and impeccable credentials. By issuing a Sukuk, the IFC and the World Bank have recognised Shariah compliant finance and securities as bona fide, valid, and acceptable financial instruments.

It is also the first time that a sizeable Sukuk will be listed exclusively in the Gulf, i.e. on Nasdaq Dubai and the Bahrain Stock Exchange, which represents an acknowledgment of the progress made by the emerging financial sector in the region, in terms of liquidity, but more importantly in terms of the trading, clearing & settlement, and the legal and regulatory environment. In fact the contractual terms of this IFC Sukuk are established under DIFC law (based on English common law), which receives, by a leading issuer, an implicit endorsement as a sound framework on par with those of other well-established jurisdictions. Confirming the maturing of our regional market, the Hilal Sukuk was arranged by a regional syndicate including Dubai Islamic Bank, Kuwait Finance House Bahrain, HSBC Amanah and Liquidity Management House.

With such a high profile precedent the investment banking community

and the legal profession will take notice and rest assured that every aspect has been thoroughly tested and can be duly replicated.

Hence, in practice the IFC Sukuk represents a historic benchmark for all future Shariah compliant financing operations by sovereign and corporate entities and sets a standard for the whole Islamic finance sector, too often hindered by a lack of standardisation, the absence of uniform rules and structures. The IFC Sukuk listing documents will provide reference documentation for other issuers from the region and internationally, thereby lowering the cost of issuing Sukuk, making them more competitive with conventional debt.

Two additional aspects are noteworthy. First, the Hilal Sukuk will raise funds for IFC infrastructure and health projects in Yemen and Egypt, stressing the ideal suitability of Islamic finance for the financing of tangible, real assets. In a region where the pipeline of infrastructure is estimated at around USD 2 trillion over the next years, the IFC has clearly indicated a direction which others would be persuaded to follow. Second, so far a liquid Sukuk secondary market in the region has struggled to emerge in part because there is a shortage of high quality securities compared to the demand by a host of Islamic institutions (which typically buy and hold most of the supply). The IFC Sukuk, rated AAA and likely to commanded a narrow spread with a profit rate of 3.0379 per cent, highlighting the appetite by investors in the region for an issue which was strongly oversubscribed and is likely to attract the attention of the international financial community. It will provide a benchmark for pricing sovereign and corporate Sukuk, being considered essentially “risk free”.

In conclusion, the IFC Sukuk has demonstrated that Dubai has the required trading, settlement & custody, physical and legal infrastructure to attract prominent issuers and investors and is

ready to accommodate the needs of the Islamic finance community. It is now up to the governments and the large state owned companies to take advantage of this breakthrough and tap the immense pool of wealth owned in the region, but invested in distant locations.

Such a course of action would be even more warranted and urgent at a time when the domestic banking system is struggling to extend credit and large international banks, mired in the aftermath of the financial crisis, are focused on regaining their balance and rebuilding their balance sheets. Given the ease with which capital market products transcend geographical borders, Shariah-compliant financing projects which originate in one country can source investors globally. The current infrastructure projects in the MENA and the Asia regions are an unprecedented opportunity to create an Islamic financial market. Infrastructure should be financed through the debt markets and no longer rely on oil & gas revenue. The IFC Sukuk has opened the way to mainstreaming Shariah compliant finance.

Indeed, the time is ripe for action on two broad fronts: the mainstreaming of Islamic financial services and products, and the integration of Shariahcompliant securities into international markets, to become an internationally recognised asset class. The egalitarian nature of Islamic finance, investment disclosure, corporate governance and risk-sharing characteristics are an antidote to the uncertainties generated by the ongoing global financial crisis.

Islamic finance has come of age and is a viable and credible alternative to conventional financing. DIFC’s strategy and policy measures have succeeded in creating the enabling environment for the establishment of a sound, wellfunctioning Islamic financial system and achieve banking and financial deepening. Islamic finance is coming of age and is now part of the international financial architecture of markets and products.

- Dr. Nasser Saidi

BANKING AND BUSINESS REVIEW

November 2009

37

INTERNATIONAL

Pendulum has swung Combination of liquidity, low rates and fiscal spending has worked, says StanChart

T

he pendulum has swung in recent months from fears of downside risks and the need for policy easing to talk of recovery and eventual monetary and fiscal tightening. But pendulums do swing back. Thus, talk of recovery needs to be kept in perspective. The world economy has been given a massive push in the right direction through sizeable, sustained, and what looks like successful policy stimulus. The combination of liquidity, low rates, and fiscal spending has worked.

The questions now being asked are, how sustainable is growth? If it is sustained, how strong will it be? And how soon can policy be tightened? Pulling these issues together, three words are

38 BANKING AND BUSINESS REVIEW

key to the global outlook: growth, balance, and policy.

The growth outlook has improved.

But then, given how much money has been thrown at the world economy, it should have done. We are optimistic about near term prospects in the US as previous policy easing feeds through.

A few months ago, when we anticipated strong growth in the second half of the year in the US, this was not the consensus, but that has now shifted.

Although emerging economies have been the main growth drivers in recent years, any rebound in the US, by far the world’s largest economy, would be of global significance both directly – in terms of output – and, just as importantly, in terms of confidence.

November 2009

Recoveries can be V-shaped, and given how hard the world has been hit, there is a logical reason for believing this could be the case now. But unlike previous US recoveries, this one lacks conviction. Underlying confidence in the US has been dented so badly, the fear is that a private-sector recovery will be sluggish. Policy is driving this pickup, but there are deep worries about the increase in debt.

Across Asia, data has been improving for some months. After the hit in Q4-2008 and Q1-2009, there has been a steady improvement in many economies. The improvement in South Korea merits attention – its economy has rebounded with three successive quarters of growth. This is in contrast with

Japan, which, despite a similar output and export picture, has been hit hard.

The depreciation of the Korean won and the effectiveness of domestic policy stimulus have been big factors. But we stress that Asia cannot boom if the West is not booming.

Instead, we expect Asia to enjoy steady but still impressive (by Western standards) growth in 2010. India, after being hit by the shock of inadequate monsoons, has shown recent signs of resilience. The trouble in Asia is still its export dependency. While y/y export figures should start to improve, for many countries, export levels will still be below those seen before last year’s crisis. The pressure remains on Asian economies to drive domestic demand.

In China, this is happening.

Asian currencies need to adjust The need for balance in the world economy has probably never been so acute. There are many facets to this: the West needs to save more, Asia and the Middle East need to spend more, and currencies need to adjust. Whilst all of these are important, the currency issue and the dollar have attracted the most attention recently. The dollar has been a key funding currency. As we approach year-end, leveraged investors may decide to take profits, reversing this process. The overwhelming mood towards the dollar is negative, and it has weakened – but it has not collapsed, and it is always possible that it could bounce, triggered by yearend closing of positions or even by a return of global risk aversion. Just as we stress that the business cycle still exists and the trend is not a one-way bet, it is worth noting that the trend for the dollar – and indeed sterling – may be down, but there can be periods of strength.

The big problem is the continued recent stability of the Chinese yuan against the dollar. CNY stability is forcing many Asian countries to fight to keep their currencies stable to maintain

Although emerging economies have been the main growth drivers in recent years, any rebound in the US, by far the world’s largest economy, would be of global significance competitiveness. In turn, this has led to the dollar weakening versus floating currencies, in particular the euro.

There is an overwhelming case for Asian countries to allow their currencies to appreciate, but most will be reluctant to do so until they are confident in the recovery. This leads to the problem of asset price inflation in many countries.

A small number of countries have hiked rates recently, including Israel, Norway, and Australia. As the recovery becomes established, domestic factors will drive monetary policy. The dilemma for many countries is that tightening early may attract hot-money inflows as investors seek higher yields.

Waiting, however, may trigger asset price inflation, with liquidity flowing into equities and property.

GCC common currency The Gulf Cooperation Council (GCC) countries had aimed to introduce a common currency in 2010, but this is

now very unlikely. The UAE did not welcome the decision to locate the central bank in Saudi Arabia, and its subsequent decision not to participate in the monetary union should not come as a surprise. Theoretically, introducing a common currency solves two problems.

First, it makes any peg more credible by making it irreversible, and makes it impossible for countries to engage in competitive devaluations (as Greece and Italy did before the introduction of the euro). That said, this has never been a problem in the GCC. Second, a common currency eliminates FX risk in the common currency area and reduces transaction costs, thereby encouraging intraregional trade. However, given that the GCC economy is dominated by hydrocarbons and services (mostly in non-tradeable sectors like real estate), intra-regional trade would be unlikely to increase even with a common currency.

The idea of having a common currency in the GCC is driven mainly by politics rather than economics. Three conditions would need to be met in order to clear the way for the successful introduction of a GCC common

BANKING AND BUSINESS REVIEW

November 2009 39

currency in the near future. First, it needs to be a GCC currency, with all six member states participating rather than four. The GCC needs to find a compromise to induce the UAE and Oman to rejoin. To make this happen, the GCC should perhaps negotiate all issues at once rather than one at a time (i.e., the location of the central bank).

This would make it easier for GCC countries to engage in a give and take bargaining process, reaching a holistic solution.

Second, the central bank needs to have a clear mandate and room to pursue a more independent monetary policy. This implies that the common currency should not be pegged to just one currency. If all GCC currencies are pegged to the US dollar (USD) and the common currency is also pegged to the USD, then the common currency will bring no change from the current situation. It is also important for all member states to have equal (rather than weighted) voting rights in the central bank so that decision-making is not dominated by just one country.

This could be a concern for smaller countries in the region. Third, the region needs to develop deeper debt capital markets. A more flexible GCC common currency has the potential to become one of the world’s reserve currencies. Central banks of oil-importing countries could choose to hold a small percentage of their reserves in the GCC currency as a natural hedge against rising oil prices. In order for this to happen, the region needs to deepen its debt capital markets and its domestic currency assets.

Recoveries can be V-shaped, and given how hard the world has been hit, there is a logical reason for believing this could be the case now benefits of pricing oil any other way.

Second, such a decision would have negative implications for the value of the USD, and hence for the USD assets GCC countries hold. Third, the USD is still the most liquid currency and the world’s reserve currency, and it provides the simplest and most transparent way of pricing oil.

We do believe that there would be benefits of de-pegging GCC currencies from the USD and following more independent monetary policies, although this is not currently on policy makers’ agenda. But this is a completely different issue.

Opposition to pricing oil in USD in countries like Iran and Venezuela is politically rather than economically driven. It is worth noting, however, that diplomatic relations between GCC states and the US are very strong, and that the US still exerts strong influence in the region.

Pricing oil There is also a view among some in the markets that the GCC countries should price oil against a basket of currencies and not in USD. In our view, this is very unlikely. There are three main reasons for this. First, oil prices tend to adjust to reflect changes in the value of the USD, and there are therefore few

40 BANKING AND BUSINESS REVIEW

November 2009

One should also differentiate between the GCC countries de-pegging their currencies from the USD and adopting more independent monetary policies.

Historically, GCC countries have faced inflationary pressures when the USD is too weak and deflationary pressures when the USD is too strong. In 2009, as the GCC business cycle has turned down and asset prices have undergone violent corrections (real-estate prices in Dubai are down by approximately 50-60 per cent from their 2008 highs), the weak USD and low US interest rates are appropriate for the region. But this is simply a coincidence. GCC countries are more likely to experience inflationary pressures before the US does, and monetary policy is constrained by the absence of deep debt capital markets and by the USD peg.

(From Standard Chartered Global Focus)

ABN AMRO Bank Head Office: The Netherlands Dubai Branch, Regional Hub for UAE and Middle East P.O.Box: 2567, Khalid bin Waleed Street, Dubai, UAE. Non-stop banking service: Dubai Branch: Colin Macdonald Burhan Khan Hassan EI Nahas Vishnu Deuskar Padmanabh Mishra

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BBK BSC Dubai-Representative Office Dubai Creek Tower Office 18A, Baniyas Road, Deira PO Box 31115

Website History: Established on 16th March, 1971

04 2210560 Tel 04 2210560 / 70 Fax 04 2210260 www.bbkonline.com

Murad Ali Murad Karim Bucheery Sh. Rashed Al Khalifa

Chairman CEO & GM Deputy General Manager

Dubai ReP-Office: Head of Representative Office Rajiv Kapoor Al-Alwan

CK Jaidev Relationship Manager & Loan Syndications Wafa Relationship Manager & Loan Syndications

Bank of Baroda Dubai Zonal Office: Sheikh Rashid Bldg.

Ali Bin Abu Talib Street, Bur Dubai, P.O.Box 3162, Dubai Tel: 04 3531628 E-mail: cc.gcc@bankofbaroda-uae.ae Fax: 04 3530839 UAE Website: www.bankofbarodauae.ae History: Established in 1908, July 20 Nationalized on July 19, 1969 Senior Management & Personnel – Baroda Corporate Centre, Mumbai, India.

Dr. A.K. Khandelwal Chairman & Managing Director Mr. V. Santhanavanam Executive Director Mr. S.C. Gupta Executive Director Zonal Office, Dubai: Ashok K. Gupta

L.J. Asthana J.K.Jais P.M. Bondarde Sujeet Bhale Rajesh Jain

Chief Executive, (GCC operations) Senior Manager (Credit) Senior Manager (Inspection) Senior Manager (Credit) Senior Manager (Syndication) Senior Manager (Internal Auditor)

04 3538093 04 3531628 04 3531628 04 3531628 04 3531628 04 3531517

Abu Dhabi: Al Halami Centre, Sheikh Hamdan Street 02 6330244/ 6322000 K. Venkateshwarlu Chief Manager 02 6344302 K.Shridhar Senior Manager (Credit) R.G. Shanker Senior Manager (Operations) Al Ain: Clock Tower, Round about, Planning Street Sarabjeet Singh Senior Branch Manager Vijay Kumar Goel Senior Manager (Operations) Dubai:

03 7519880 03 7659554

Sheikh Rashid Bldg.Ali Bin Abu Talib Street,

44 BANKING AND BUSINESS REVIEW

November 2009

Bur Dubai, Vinod Malhotra Asst. General Manager Shekhar Tripathi Senior Manager (Operations) M.K. Patel Senior Manager (Credit) Beena Desai Manager (India Desk) Retail banking Shoppe, Dubai Mr. Saravana kumar

Mr Ketan Dave

Mr Vinay Rathi

04 3531955 04 3534516 04 3530166 04 3534080 04 3537586 04 3534390 04 3540041 04 3540340

Deira Kuwaiti Bldg., Al Rigga, Baniyas Street, Deira Rajiv K. Garg Chief Manager Yuvraj Singh Senior Manager (Operations) P.K. Gambhir Senior Manager (Credit) R.K. Madaan Manager

042287949 04 2286516 04 2286216 04 2292181 04 2292181

Ras Al Khaimah: Al Qasimi Bldg, Oman Street, Al Nakheel P.K.Bhargav Senior Branch Manager

07 2229293 07 2229293

Sharjah Al Mina Road 06 5684231/ 5686232 M.S. Chouhan Asst. General Manager 06 5683273 D. Pathania Senior Manager (Credit) 06 5684231 D. Guha Senior Manager (Operations) 06 5686232

Bank of New York Representative office Suite 402, The Blue Tower, Sh. Khalifa Bin Zayed Street P.O.Box 727, Abu Dhabi Hani Kablawi Managing Director

Tel 02 6263008 Fax 02 6263308

Bank of Sharjah Sharjah Head Office – Al Hosn Avenue Tel 06 5694411 P.O. Box 1394, Sharjah Fax 06 5694422 E-mail: bankshj@emirates.net.ae History: Established on 22nd December 1973 with Banque Paribas, Paris Ahmed Abdulla Al Noman Chairman Varouj Nerguizian General Manager Mario Tohme Deputy General Manager Fadi Ghosn Deputy General Manager Ali Burheimah Commercial Manager Mohammed Asghar Senior Operations Manager Fares Saade Senior Manager Michel Germanos Risk Manager Jayakumar Menon Finance Manager Berj Tossounian Credit Manager - Sharjah Wahide Assaad IT Manager Jihad Aoun Investment Manager Samer Hamed Audit & Control Manager Abu Dhabi Tel 02 6795555 Al Mina Street, P.O.Box 27391 Fax 02 6795843 Ramzi Saba Senior Manager Mazen El Attar Operations Manager- Abu Dhab Anni Barsoum Credit Manager - Abu Dhabi Dubai Tel 04 2827278 Al Gharoud Street, PO Box 27141 Fax 04 2827270 Nadim Melki Senior Manager Toufic Youakim Credit Manager - Dubai Fadi Haddad Operations Manager - Dubai Al Ain 03 7517171 Khalifa Street, PO Box 84287 Fax 03 75170770 George Dib Branch Manager Rida Higazi Deputy Branch Manager

Barclays Capital Dubai International Financial Centre, Level 9, West Wing, The Gate Building, Sheikh Zayed Road, Dubai Nicholas Hegarthy Managing Director, Head of Middle East & North Africa

Bank Saderat Iran Dubai Regional Office, Al Maktoum Street, P.O. Box 4182

Tel 04-6035555 Fax 04 2229951

Dr.Hamid Borhani Regional Manager Abdul Reza Shabahangi Assistant Regional Manager Mohammad Yousefi Peyhani Assistant Regional Manager Majid Tavasoli H.R. & Organization Dept. Manager Gholamreza Joulaie Credit Facility Dept. Manager Rahim Erfan Moghaddam Account Dept. Manager Mehran Arzhang Letter of Credit Dept. Manager Majid Mirnasiri Recovery Dept. Manager Hamdi Reza Khalajzadeh Dealing Dept. Manager Hojatollah Malek Mohammadi IT Dept. Manager Mansoor Sedaghat Motlagh Service Dept. Manager Mohsen Hossein Hosseinpour Manager of Al Maktoum Branch Gholamreza Ebadi Fard Manager of Murshid Bazar Branch Saeed Mirzaian Tafti Manager of Sheikh Zayed Rd. Branch Ferdos Zolfagharian Manager of Bur Dubai Branch Seifollah Farzan Mehr Manager of Sharjah Branch Jalil Vosooghi Manager of Ajman Branch Ali Abasteh Manager of Abu Dhabi Branch Peyman Sabri Manager of Al Ain Branch

Banque Du Caire Abu Dhabi Regional Head Office (02) 6225880 P.O. Box 533, Abu Dhabi Telefax 02-6225881 History: Established on 8th May, 1952 On July 1, 1960 the Amman Branch became independent under the title of Cairo Amman Bank. In July, 1961 the Bank was nationalized. On November 2, 1962 the Lebanese branches were absorbed by Banque Misr-Liban S.A.L On October 1, 1979 fo3rmer branches in Saudi Arabia have been saudized and a new bank was formed under the name of Saudi Cairo Bank.

Mohamed kamal Al Deen Barakat Chairman Ahmad Sherif Rehab Regional Manager Abu Dhabi - UAE PO Box 533 Tel: 02-6272525 Abu Dhabi Branch Mohamad Kamal Farid (Acting Manager) Tel: 02-6273000 Dubai Branch Labib Abdul Ghaffar Tel: 04-2715175 Sharjah Branch Tareq Hafez Tel: 06-5739379 Ras Al Khaima Mohamad Abdul Ghani (Acting Manager) Tel: 07-2332245 Al Ain Abdul Hamid Saeed Tel: 03-7511104

Barclays Bank PLC Dubai Emaar Business Park, Building No. 4, Sheikh Zayed Road P.O. Box: 1891, Dubai Website www.barclays.com Saleem Sheikh Africa Mark Petchell Amin Habib Faizen Mitha Farrukh Zain Florence Goodman David Inglesfield ing Callum Watts-Reham Clients

Tel: 04 3626888 Fax: 04 3663133

Regional Managing Director, Middle East & North Group Country Managing Director Director - Corporate Banking Regional Treasurer Head of Trade Sales Head of Corporate Afffairs & Public Relations Location Manager - International & Premier BankDirector, Market Manager, Gulf - Barclays Private

BLC Bank (France) S.A. Head Office 17-19 Avenue Montaigne 75008 Paris, France Mr. Andre Tyan General Manager

Tel 33 1 56 52 11 00 Fax 33 1 56 52 11 11

Regional Office Dubai Al Maidan Tower, Al Maktoum St. Tel 04 2222291 P.O. Box 4207, Dubai Fax 04 2283935 E-mail: blcdxbrm@emirates.net.ae Melhem Dagher Administration & Operations Manager Dubai Al Maidan Tower, Al Maktoum St. P.O. Box 4207, Dubai Hamze Abdul Sater Branch Manager Abu Dhabi Mohd. Joan Al Badi Bldg., Hamdan St. P.O. Box 3771 Ghassan Haddad Acting Regional Manager Samir Rached Acting Branch Manager

Tel 04 2222291 Fax 04 2279861

Tel 02 6220055 Fax 02 6222055

Sharjah Al Salam Bldg., Al Mina St. P.O. Box 854 Victor Khoriaty Branch Manager

Tel 06 5724561 Fax 06 5727843

Ras-Al-Khaimah Sheikh Ahmad Bin Saker Al Quasimi Bldg., Al Montaser St. P.O. Box 771 Abd El Hajj Branch Manager

Tel 07 2286222 Fax 07 2275067

BNP Paribas Abd Ahmad Al Hajj Branch Manager Abu Dhabi Khalifa Street, P.O. Box, 2742, Abu Dhabi Marc Checri General Manager

Tel 02 6130400 Fax 02 6268638

Central Bank of the U.A.E Abu Dhabi Tel 02 6652220/6915555 Head Office, Al Bateen Area, Bainoona Street Fax 02 6668483/6668621 P.O.Box: 854, Abu Dhabi, www.cbuae.gov.ae E-mail: sultan_rashid@cbuae.gov.ae Swift: CBAU AE AA Reuters dealing code: CBEM History Established in 1980 as a central bank of the United Arab Emirates by a federal decree. Central bank took over the activity of the United Arab Emirates currency board which was established in 1973.

Management & Personnel H.E. Sultan Bin Nasser Al-Suwaidi Governor H.E. Mohd. Ali Bin Zayed Al Falasi Deputy Governor Board of Directors H.E. Mohd. Eid M. Jasim Al-Meraikhi H.E. Jumaa Al-Majid

BANKING AND BUSINESS REVIEW

Chairman Vice Chairman

November 2009

45

H.E. Sultan Bin Nasser Al-Suwaidi

Governor

Members Ali Al-Sayed Abdulla, Jamal Nasser Lootah, Khalifa Nasser Bin Huwaileel, Saeed Rashid Al Yateem Al Muhairy Executive Directors Saeed Abdulla Al Hamiz nation Dept.

Rashid Mohamed Al Fandi Saif Hadef Al Shamesi Salem Ahmed Al-Hammadi Abdulla Hamad Al-Zaabi Jamal Ebrahim Al Mutawaa

Executive Director-Banking Supervision & ExamiExecutive Director - Banking Operations Dept.

Executive Director - Treasury Department Executive Director - Research & Statistics Department Executive Director - Internal Audit Department Executive Director - Administration Department

Economic Advisors Abed Alla Osama Malki, Mohammed Zeitouni Bechri Portfolio Managers Mohammed Abdulla Mohammed, Brian Gardner Anti-Money Laundering & Suspicious Cases Unit Abdul Rahim Mohamed Al Awadi Asst. Executive Director General Secretariat & Legal Affairs Division Salem Said Al Kubaisi

Senior Manager

Financial Control Department Hassan Ibrahim Al Hamar

Senior Manager

Personnel Division Ali Ghurair Al Romaithi

Senior Manager

Correspondent Banking Division Sultan Rashed Al-Sakeb

Senior Manager

Public Relations Division Abdul Raheem Abdullah

Manager

Information Technology Division/ UAE Switch Division Khalifa Al Dhaheri

Senior Manager

Dubai P.O. Box 448 Omar Al Qaizi Manager-in-Charge

Tel: 04 3939777 Fax: 04 3937802

Sharjah Tel: 06 5592592 Old Airport Road, Opp. Immigration Bldg., P.O. Box 645, Sharjah Fax: 06 5593977 Zakaria Abdul Aziz Al Suwaidi Senior Manager Ras Al Khaimah Al Nakheel, Oman Street, P.O. Box 5000 Salem Jasem Al Baker Asst. Executive Director

Tel: 07 2284444 Fax: 07 2284646

Fujairah P.O. Box 768, Fujairah Ali Mubarak Saeed Abbad Senior Manager

Tel: 09 2224040 Fax: 09 2226805

Al Ain Ali Ibn Abee Taleb Street, Oud Al Touba P.O. Box 1414 Ajlan Ahmed Al Qubaisi Asst. Executive Director

Tel: 03 656656 Fax: 03 664777

Citibank N.A (UAE Branches) Date of Establishment 1964 Nationality USA Legal Status

46 BANKING AND BUSINESS REVIEW

November 2009

Commercial Banking Services (F) Regional Head Office Oud Metha Towers P.O Box 749, Dubai – UAE Tel: 04- 3245000 Telex: 023 6738736 Cable: CITIBAEM Swift: CITIAEAD Reuters: N/A Email: karim.seifeddine@citi.com Website: www.citibank.ae Auditors: KPMG Domestic Branches: Al Wasl Road Branch (Main Branch) Tel: 04 3245000 Oud Metha Road, P.O Box 749 Dubai Branch (Next to Burjuman) Tel: Abu Dhabi Branch Tel: 02 6982206 Al Salam Street, Next to Lulu Center Fax: 02 6726381 P.O Box 999, Abu Dhabi Sharjah Branch Tel: 06 5072101 Beside Sharjah Emigration, Fax: 06 5723378 Opposite Civil Court. Sharjah Al Ain Branch Tel: 03 7641090 Sh. Zayed Street Fax: 03 7663887 Broad of Directors: N/A General Management: Mohammed E. Al- Shroogi, MD for the Middle East and Chief Executive Officer, UAE Sanjoy Sen, Country Business Manager Global Consumer Group - U.A.E Mohammed Azab, Chief Officer, UAE Offices, Citi Private Bank

Clearstream Banking Dubai Tel 04 3310644 City Tower 2, Sheikh Zayed Road Fax 04 3316973 Website: www.clearstream.com Robert Tabet Vice President Middle East & North Africa

Commercial Bank International Dubai Tel 04 2275265 Head Office Dubai Al Riqqa Street Deira , P.O Box 4449 Tel : 04 2275265 Website : www.cbiuae.com

Hamad Al Mutawaa H.E. Humaid Al Qatami Abdulla Rashid Omran

Fax : 04 2279038

Mohammed Saadeh Abdulla Amer Jasem Hesham Abdulla Ahmed Mustafa Tahoun

Ramanthan Murgappan

Zainab Nour Aldin Yousef Haddad Bashir Haji Mohd A.D.Abooty K.E Mammoo Faris Saddi Yousef Al Marshoudi Tariq Selaij Ameena Bin Kaali Ahmed Al Junaibi Abdulla Ali Almadhani Mohammed Ishaq Ahmed Darwish

Head of GBG 04 2126500 Head of HR & Admin 04 2126466 Head of Branches & Services 04 6020615 Head of Internal Audit & compliance Division 04 2126603 Senior Manpower planning & Recruitment Manager 04 2126444 Employee Relations Manager 04 2126 442 Planning & Development Manager 04 2126190 Chief Dealer 04 2126214 Head Of Operations & Finance 04 2126291 Accounts Manager 04 2126215 Chief information Officer 04 2060700 Dubai Branch Manager 04-2275265 Bur Dubai Manager 04-3559577 Sheikh Zayed Branch Manager 04 3405555 Abu Dhabi Branch Manager 02-6913111 Al Ain Branch Manager 03 7669994 RAK Branch Manager (AL Manar Mall) 07 2274777 RAK Branch Manager (Nakhel Branch) 07 2227555

Chairman Deputy Chairman Managing Director and Board Member 04 2242104

Alyia Al Mulla Ahmed Bin Masood Fujairah Branch Manager

Sharjah Branch Manager

06 512100 09 2011777

Dubai Main Branch (Al Riqqa Street) Yousef Al Marshaudi Branch manager Bur Dubai Tariq Sulaij Branch manager Sheikh Zayed Road Ameena Mhd. Bin Kaadi Branch manager Abu Dhabi Ahmed Sulaim Al Junaibi Branch Manager AL AIN Abdulla Ali Branch manager Ras Al Khaimah Khaled Al Mannai Branch Manager (Manar Mall) Ahmed Yousef A. Darwish Branch Manager (Nakeel Branch) Sharjah Aliya Al Mulla Branch manager

04 2126101

04 3405555

Representative Office - Dubai Tel 04 2217007 Twin Towers, Baniyas Street, Deira Fax 04 2217006 P.O. Box 42220 Sarah Deaves CEO Sandra Shaw General Manager Martin Bond Private Banker

02 6264400 03 7669994 07 2274777 07 2227555 06 5687666

Commercial Bank of Dubai COMMERCIAL BANK OF DUBAI, P.O. BOX 2668, AL AITIHAD STREET, DUBAI TOLL-FREE: 800 CBD (223) TEL: 04 2121000 FAX: 04 2121911 E-Mail: cbd-ho@cbd.ae Website: www.cbd.ae MANAGEMENT COMMITTEE Peter Baltussen Yaqoob Yousuf Hassan Ibrahim Abdulla Mahmoud Hadi Faisal Galadari Ahmed Shaheen HEADS OF DEPARTMENTS Stephen Davies Moukarram Attasi Frans Jan Burkens John Tuke V.P Bhatia Masood Azhar Amir Afzal Adel Al Sammak Kanan Iyer Alan Hill Abdul Rahim Al Nimr Badr Soueidan Nabil Tayyeb Mr. Mohamed Mardood Mr. Hassan Al Redha Akram Gharabeh Waleed Bin Suloom nels Jamal Saleh Salah Omer Rahmatulla Khan Nigel Foster Wafaii Tamimi REGIONAL MANAGERS Mr. Abdul Aziz Al Ansari Ibrahim Salama Othman Bin Hendi Region Alsayed Mohd. Al Hashimi Marwan Ibrahim Ahmed Al Aboodi

Coutts & Co.

04 3555511

Chief Executive Deputy Chief Executive General Manager, Administration & Finance General Manager, Systems & Operations General Manager, Business Group General Manager, Credit & Risk Management Head of Corporate Banking Head of Asset Management Head of Consumer Banking Head of Treasury & ALM Head of Treasury Trading Head of Strategic Planning Department Head of Information Technology Head of Commercial Banking Head of Internal Audit Head of Treasury Sales Head of Wealth Management Head of Marketing Head of Islamic Banking Head of Central Operations Department Head of Financial Institutions Head of Financial Control Head of Personal Banking and Alt Banking ChanHead of Risk Management Head of Legal Services Head of Consumer Products Head of Human Resources Strategy Head of Recovery AGM, Sharjah Branch Regional Manager, Main Region Regional Manager, Abu Dhabi & New Dubai Regional Manager, Deira Region Regional Manager, Northern Emirates Region Regional Manager, Bur Dubai Region

Calyon Corporate & Investment Bank

(Previously Crédit Agricole Indosuez & Crédit Lyonnais)

Dubai World Trade Centre, Level 32 Tel: 04 3314211 P.O.Box: 9256 Fax: 04 3313201 Website: www.calyon.com Amr Alkabbani Regional Manager – Gulf 04 3317316 Ludovic Bernard-Maissa Regional COO

Eric Fromaget Head of Private Banking 04 3321300 Sebastian Van der List Head of Corporate Banking – UAE 04 3315836 Naeem Khan Trade Finance 04 3291055 Albert Mondjian Head of Investment Banking – MEA 04 4284803

Abu Dhabi Al Muhairy Centre, Level 5 Tel: 02 6351100 Block C, Sheikh Zayed the First Street Fax: 02 6344995 P.O.Box: 4725 Ghazi Abdul Fattah Branch Manager 02 6351991

Credit Suisse Abu Dhabi Dhabi Tower, 4th floor, Sheikh Hamdan Street P.O.Box 47060 Jean-Marc Suter Director

Tel 02 6275048 Fax 02 6274109

Dubai P.O. Box 33660 04 3620000 The Gate bldg, 9th Floor Fax 04 3620001 Dubai International Finance Centre ( DIFC), Dubai Head of Regional Office Beat Naegell

Deutsche Bank A G Abu Dhabi P.O.Box 52333 E-mail: jens.moeller@db.com Jens Moeller Representative

Tel 02 6333122 Fax 02 6322044

Dubai P.O. Box: 50490 Emirates Towers, Level 27b Fax 04 3199560 Karl French Director Tel : 04 3199514

Private Wealth Management - Asia Nadeem Masud Director Tel : 04 3199524

Global Markets Harris Irfan Vice President Tel : 04 3199520

BANKING AND BUSINESS REVIEW

November 2009

47

Rohit Johri

Global Equities & Derivatives Vice President Tel : 04 3199522 Private Wealth Management - Asia

Dresdner Bank AG Dubai Representative Office Burjuman Business Towers, 10th Floor, Office 1011 Bur Dubai, P.O. Box: 25654 Tel 04 3596444

Fax 04 3596116 E-mail: RepDubai@Dresdner-Bank.com Bashar A. Barakat

Dubai Main Branch, Baniyas Road, Deira Tel 04 2256900 P.O. Box 2923, Dubai Fax 04 2267718

Dubai Bank Tel 04 3328989 Fax 04 3290071

History: Established in September 2002 Ziad Makkawi

Chief Executive Officer

Dubai Islamic Bank Head Office Al Maktoum Street, Dubai Tel 04 2953000 P.O. Box 1080, Dubai Fax 04 2954111 Website: www.alislami.co.ae History: Established March 12, 1975 Dr. Mohammed Khalfan Bin- Kharbash Chairman Butti Khalifah Bin Darish Al- Falasi CEO Saad Mohammed Abdul Razzaq Deputy CEO Mohd. Saeed Al Sharif Executive Vice President-Finance Arif Ahmed Al Koheji Executive Vice President-Investment Banking Abdullah Ali Al Hamli Executive Vice President - Business Services Ahmed Mohammed Fadel Legal Consultant and Board Secretary Branches Deira Main Branch Al Souk Sheikh Zayed Rd Nad Al Shiba Bur Dubai Jumeirah Ladies Branch Al Barsha Ajman Sharjah Wasit Road Al Dhaid Khorfakan Abu Dhabi Khalidiah Ladies Branch Al Salam Bani Yas Al Ain Al Ain Mall Ras Al Kheimah Fujairah

48 BANKING AND BUSINESS REVIEW

Abu Dhabi P.O.Box 46013 Tel 02 6269995

Fax 02 6275551 Abdulla Mahmoud Awad Manager Tel 02 6720934 Mohamed Osman Salih Deputy Manager 02 6761916 Murlidhar G. Ramchandani Chief Accountant & Dealer 02-6729300 Ahmed Hillali Ahmed Head Investment Dept. & Credit 02-6729300

Emirates Bank International

Chief Representative Regional Head GCC & Yemen

Main Office Sheikh Zayed Road, Near Dubai World Trade Centre P.O. Box 65555, Dubai E-mail: info@dubaibank.ae Website: www.dubaibank.ae

El Nilein Bank

04 2959999 04 2233300 04-3437777 04 3907777 04 3971717 04 3429955 04 3406000 06 7466555 06 5726444 06 5584455 06 8826682 09 2370080 02 6346600 02 6677119 02 6450555 02 5825511 03 7644111 03 7515155 07 2284888 09 2221550

November 2009

Branches Abu Dhabi 02 6455151 Hameed Sheikh Manager Al Ain 03 7510055/77 Ghanim Al Hajeri Manager Al Maktoum Ali Malallah

Manager Al Quoz Mohd. Abdulla

Manager Baniyas Square Sherif Al Ulama Manager Bander Talib Fareed Aquilli Manager Dubai Main Branch Amal Al Qamzi Manager Fujairah 09 2222114/110 Yousif Al Marshoudi Manager Internet City 04 3910840/1 Balakrishnan Nair Manager Galleria Farida Al Balooshi Manager IBN Gardens 04 8844689 Hamdan Mohd. Abdulla Manager Jebel Ali Free Zone 04 8815551 Abdul Rahman Ibrahim Manager Karama Muna Al Falahi Manager Karama Shopping Complex Nawal Al Khader Manager Mankhool Abdul Rahim Abdulla Manager Qiyadah Fatima Al Midfa Manager Ghusais Fatima Al Midfa Manager Ramoul Ibrahim Hassan Manager Ras Al Khaimah 07 2272333 Khalifa Bin Kalban Manager Satwa Mohamed Bilal Manager Sharjah Industrial Area 06 5345577 Mohamed Al Shouq Manager Sharjah 06 5733300 Mahmoud Saif Manager Souk Samia Al Aqady Manager

Umm Suqueim Nazia Kalban Manager Tower Saif Al Mansoori Manager World Trade Centre Abdulla Sulaij Al Falasi Manager Najdah Butti Al Assiri Manager

Ms. Lina Abdul Hamid I. El Araj Manager – General Services 02 6194702 Mr. Tarek Soubra Vice President – Central Operations 02 6194362 Ms. Maha Al Jamal Senior Manager – Marketing 02 6194893

First Gulf Bank 02 6771919

Emirates Industrial Bank Abu Dhabi - Head Office Tel 02 6339700 P.O. Box 2722, Abu Dhabi Fax 02 6319191/6326397 E-mail: indbank@emirates.net.ae Dubai Tel 04 2211300 Arbift Tower, Deira P.O. Box 5454, Dubai Fax 04 2232320 E-mail: eibdubai@emirates.net.ae Website: www.emiratesindustrialbank.net Senior Management Personnel/Branch ManagerMohamed Abdulbaki Mohamed General Manager Ahmed Mohamed Bakhit Khalfan Deputy General Manager Abdullah Rashed Omran Dubai Branch Manager Khalifa Al Falasi Acting Projects Division Manager Ali Ahmed Al Essa Development Services Division Manager Nasser Haji Malek Administration Manager Essa A. Bu Al Rougha Internal Audit Manager Mohamed Moneir Makled Finance Manager Salem Abu Baker Salem Acting Loans Division Manager

Emirates Islamic Bank P.O. Box: 6564, 2nd & 3rd Floor, Al Gurg Tower 1 Tel: 04 3160330 Plot 372 - Riggat Al Buteen, Deira, Dubai.

Fax: 04 2272172 www.emiratesislamicbank.ae Ebrahim Fayez Al Shamsi CEO 04 3160330 Abdulla Showaiter (General manager – corporate and investment banking) Faisal Aqil General manager – retail banking Ahmed Fayez Alshamsi chief financial officer Syed Imran Bashir Head of marketing and product development Samih Mohd Qadri Awadalla head of branches Nasir Ahmed Khan head of consumer finance Zahir Mulla head of operations IMB (Main Branch) P.O. Box: 6564, Al Gurg Tower 2, Riggat Al Buteen, Dubai.

BUD (Bur Dubai) P.O. Box: 6564, Khalid Bin Walid Road, Dubai.

DFR (Diyafa) P.O. Box: 6564, Diyafa Road, Dubai.

RIQ (Riqqa) P.O. Box: 6564, Omar Bin Al Khattab Street, Dubai.

ADC (Abu Dhabi) P.O. Box: 46077, Sheikh Rashid Bin Saeed Al Maktoum Street, Abu Dbahi.

ROS (Ras Al-Khaima) P.O. Box: 5198, 191 Oman Street, Al Nakeel, Ras Al Khaima.

Fuj (Fujairah) P.O. Box: 1472, Sheikh Hamad Bin Abdulla Street, Fujairah.

AJS (Al Ain) P.O. Box: 15095, Jawazat Street, Al Ain. QFS (Umm Al-Qaiwain) P.O. Box: 315, King Faisal Road, Umm Al Qaiwain.

SBA (Sharjah) P.O. Box: 5169, Al Arooba Bank Street, Sharjah.

Finance House P.J.S.C. Mr. Mohammed Abdullah Jumaa Al Qubaisi Mr. Abdul Hamid Umer Taylor General Manager Mr. T.K. Raman Chief Operating Officer Mr. Mohammed Wassim Khayata Executive VP – Strategic Planning Mr. Ramesh S. Mahalingam Chief Investments & Financial Officer Mrs. Shagufta Farid Khan Head of Internal Audit

Chairman 02 6194998 02 6194889 02 6194445 02 6194601 02 6194223

Abu Dhabi Tel 02 6816666 Head Office, Sh. Zayed Second Street, Khalidiya P.O. Box 6316, Abu Dhabi Website: www.fbg.ae History: Established in 1979 Shareholder Equity of over AED 10 billion Senior Management Abdulhamid Mohammed Saeed Managing Director 02 6920502 Andre’ Sayegh Chief Executive Officer 02 6920506 Amit Wanchoo Head of Retail Banking Group Arif Shaikh Chief Credit & Risk Officer George Abraham Head of Corporate Banking Gopi Krishna Madhavan Head of Human Resources Hana Al Rostamani Strategic Planning Head Karim Karoui Head of Business Planning & Financial Control Nadeem A. Siddiqui Head of International Business Shafiqur Rehman Adhami SR. VP, CB FI\SYN\MNC\OIL & Energy Sector Zafar Habib Khan Chief Investment Officer Zulfiquar Ali Sulaiman Business Support Director

Habib Bank A.G. Zurich Head Office: Zurich, Switzerland Zonal Office: Dubai Tel 04 2214535 Baniyas Square Deira, P.O. Box 3306 Fax 04 2284211 E-mail: hbzcad@habibbank.com Website: www.habibbank.com History: Established in 1967 Reza S. Habib Joint President Arif Lakhani Chief Executive Vice President 04 2229985 Asad Habib Senior EVP Afzal Memon Senior EVP Shariq Ali Senior EVP Deira Mains 04 2214535 Najibullah Khan Branch Manager Farrukh Iqbal Deputy Branch Manager Corporate 04 3513777 Awais Hasan Branch Manager Sharjeel Vijdani Deputy Branch Manager Al Fahidi Street 04 3534545 Zain Ghazali Branch Manager Abdul Basheer Deputy Branch Manager Jebel Ali 04 8812828 Nisar Chowdhary Branch Manager Ifthikhar Memon Deputy Branch Manager Sh.Zayed Branch 04 3313999 Zia Abbas Mirza Branch Manager Kashif Aijaz Dodhy Deputy Branch Manager

Abu Dhabi Sh. Hamdan Imamat Naqvi Area Manager Farhan Bakhshy Branch Manager Al Falah Syed Akhtar Hussain Branch Manager Raid Saleem Ansari Deputy Branch Manager Sharjah Al Boorj Avenue Younus Warsi Area Manager Kausarullah Khan Branch Manager

BANKING AND BUSINESS REVIEW

November 2009

02 6346888 02 6422600 06 5730004

49

Habib Bank limited Abu Dhabi Tel 02 6224688 Main Branch, Corniche Road, P.O.Box 897, Abu Dhabi Fax 02 6225620 E-mail: hbl2003m@emirates.net.ae History: Established on August 25, 1941Nationalised on January 1, 1974 On June 1974 absorbed Habib Bank Ltd. On June 30, 1975 absorbed Standard Bank Ltd., Karachi Aman Aziz Siddiqi EVP/RGM 04 3597753 Mohammad Tanvir HR. Manager 04 3592292 Fouad Farrukh GRM 04 3592214 Sh. Abdul Basit AVP/CAD Manager 04 3592539 M. Amin Usman AVP/Treasury 04 3591893 Ahmed Faraz Faruqi VP/Head ICU 04 3592517 Nadeem Zia VP/Head FINCON 04 3592292 Syed Ali Gohar VP/IT/Head 04 3592820 Abdul Shahid Khan VP/Head Cops 04 3591874 Abu Dhabi Sh. Zayed Road, 2nd Street Mushtaq H. Shah Service Manager 02 6344557 Abu Dhabi Main Branch M. Saadat Cheema VP/Chief Manager 02 6224655 Al Ain 03 7642555 Abdul Jalil Al Fahim Bldg.

Adbul Hameed Khan AVP/Senior Manager 03 7642555 Dubai Regional Office Sahibzada M. Taimur SVP/Corporate Manager 04 3596922 Sameera Mohammad Service Manager 04 3592016 Sheikh Zayed Road, Kalantar Tower Khalid Bin Shaheen SVP/Director 04 3431421 Mahdi Hassan Business Development Manager 04 3438081 Isar-Ul-Haq Service Manager 04 3438081 Deira Branch, Creek Road Zulfiqar Ahmad Bhatti Service Manager 04 2253292 Sharjah 06 5682552 / 5683473 Al Boorj Avenue Assad Ali Shaikh AVP/Branch Manager 06 5695122 Dhaid & Dibba 06 8822249 Near Al Dhaid Police Station 06 8822249 Abdul Sattar Badi Service Manager 06 8822249

HDFC Bank Representative Office: Dubai Juma Al Majid Bldg., Opp Bur Juman Centre P O Box 64546, Email: hdfcbank@emirates.net.ae Faisal Saeed Cheif Representative

Tel 04 3966991 Fax 04 3967010 Tel 04 3966991

HSBC Bank Middle East Ltd Head Office: Jersey, Channel Island Middle East Management Office, Dubai Internet City

Tel: 04 3904722

Fax: 04 3906607 HSBC Bldg., Dubai Internet City, P.O. Box: 66, Dubai, UAE Web: www.hsbc.ae UAE Web: www.uae.hsbc.com Youssef Nasr Chairman David Hodgkinson Director Ken Matheson Regional Chief Operating Officer Abu Dhabi 02 6332200/6152215 Al Ain 03 7641812 Dubai 04 3535000

50 BANKING AND BUSINESS REVIEW

November 2009

Deira Fujeirah Jebel Ali Ras Al Khaimah Sharjah

04 2227161 09 2222221 04 8846133 07 2333544 06 5537222

IndusInd Bank Dubai Representative Office Tel 04 3978803 203, Safa Commercial Bldg.

Fax 04 3978805 Opp. Bur Juman Centre, P.O. Box: 111873, Dubai.

E-mail: ibldubai@indusind.ae Pradeep Gupta Vice President & Chief Representative 04 3978804

ING Asia Private Bank Ltd Dubai Representative Office

Tel 04 4277100 602, Level 6, Building 4

Fax 04 4257801 Burj Dubai Square Sheikh Zayed Road P.O Box 4296, Dubai – UAE Suresh Nanda Managing Director & Head Eric Lorentz Managing Director Varun Bukshi Executive Director Melwyn Dias Executive Director B.R. Subramanian P.G. Bhaskar Ranjit Paul Piyush Bhandari Nitin Bhatnagar Rishi Chauhan Asad Dadarkar Ashraf Al Yamani

Director Director Director Director Director Director Director Director

InvestBank Sharjah Tel 06 5694440 Al Boorj Avenue, P.O. Box 1885 Fax 06-5694442 E-mail: sharjah@invest-bank.com Website: www.invest-bank.com History: Established on 2nd February 1975 as Investment Bank for Trade & Finance On July 1, 1995 name changed to Investbank.

Sami Farhat General Manager Qasim Kazmi AGM. Operations & Treasury Taleb Zaarour Senior Manager-ADM & Legal Athar Anis Manager, Credit Risk Bassam Hollmerus Chief Dealer Sajjad H. Holimerus Trade Finance Madhu Pilakazhi Financial Controller Ghassan Accari Personnel Manager Vinay Gupta IT Manager Dubai 04 3213131 Sheikh Zayed Road Dubai 04 2285551 Al Maktoum Street Al Ain 03 7644446 Al Ghaba Street Abu Dhabi 02 6794594 Sh. Khalifa street Abu Dhabi 02 5555336 Mussaffa Area Sharjah 06 5420333 Industrial Area

Janata Bank Abu Dhabi Obied Sayah Al-Mansuri Building

Tel No 02-6331400 Electra Road, Post Box No. 2630

Fax : 02-6348749 Email

jbadas@emirates.net.ae Mr. Md. Masuduzzaman Chief Executive

02-6344543 Mr. Md. Chaynul Haque IT Manager/SPO

02-6340881 Mr. Md. Ramjan Bahar

System Administrator/PO 02-6340881 Abu Dhabi Mr. Mohamudul Hoque Manager

0 2-6344542 Dubai Mr. Md. Abdul Awal

Manager Mohammad Saleh Al-Gurg Building

0 4-2281442 Al-Borj Street, P.O. Box 3342 Mr. Md. Mizanur Rahman Manager Sharjah Saqer Bin Rashid Al Quassim Building Al Suwaiheen Street, P.O. Box- 5303 0 6-5687032 Mr. Md. Mizanur Rahman Manager Al Ain Branch Mr. Md Shahadat Hossain Manager Sk. Khalifa Bin Mohd. Al-Nahyan Building, Main Market Centre, Main Street, P.O. Box- 1107

0 3-7513425

Lloyds TSB Bank plc Dubai Main Branch Al Wasl Road, Opp. Safa Park Tel 04 3422000 P.O. Box: 3766, Dubai, UAE Fax 04 3422660 E-mail: information@lloydstsb.ae Website: www.lloydstsb.ae Vivek Vohra Head of Corporate Origination Giles Cunningham Regional Manager, UAE & Gulf States 04 3023267 Bert de Ruiter Managing Director 04 3023267 Steve Williams Consumer Banking Director 04 3023267 Jon Mortell Head of Corporate Banking 04 3023266 Suresh Jadhwani Treasury Manager 04 3023256 Tim Goddard Head of Operations and IT 04 3023250 Derek Vaz Head of Finance and Planning 04 3023330 Caroline Ridley HR Manager 04 3023270 Steve Snowdon  Head of Middle Office Alex de Melo Head of Treasury Trading Edson Suppo Head of Treasury Strategy & Risk Claire Thomas Head of Human Resources Dubai Customer Service Centres Community Centre at Arabian Ranches, Dubai

Dubai Healthcare City (Behind Wafi City)

Tel 04 3023318 Fax 04 3618035 Tel 04 3023349 Fax 04 3624805

Man Investments Middle East Limited Representative Office Dubai Tel 04 3604999 Level 5, West Wing, The Gate, Dubai Internaional Financial Centre Fax 04 3604900 P.O. Box: 73221, Dubai Website: www.maninvestments.com E-mail: ManDubai@maninvestments.com Patrik Merville Chief Executive Officer Kamlesh Bhatia Deputy Chief Executive Officer

Mashreqbank Dubai Head Office, Omar Bin Al Khatab Street, Deira

P.O. Box 1250, Dubai History: Established on 1st May, 1967 as Bank of Oman Limited. On October 1st 1993 name was changed to MashreqBank PSC. bdullah Al Ghurair President and Chairman Abdul Aziz Al Ghurair CEO Ali Raza Khan Head of Corporate Affairs Douglas Beckett Head of Retail Banking Omar Bouhadiba Head of Investment and Corporate Banking Nabeel Waheed Head of Treasury and Capital Markets Nigel Morgan Head of Audit Review & Compliance Majid Husain Head of Financial Institutions Somnath Menon Head of Operations & Technology Kantic DasGupta Head of Risk Management Alexander Sinclair Head of Technology Mubashar Khokhar CEO of Badr Al Islami Ebrahim Kazi Head of Marketing and Corporate Communications Saad Hakim Events and Public Relations Manager Al Khaleej Street, Deira

04 2717771 Souq Al Kabir Branch 04 2264176 Hor Al Anz, Deira 04 2623100 Jumeirah Branch 04 3441600 Jebel Ali 04 8815355 Khor Branch 04 3534000 Bur Juman Centre 04 3527103 Al Riqa, Deira 04 2229131 Al Aweer 04 3333727 Abu Dhabi 02 6274300 Main Branch, Khalifa Street Musaffa 02 5555051 Zayed the 2nd Street 02 6334021 Al Salam Street 02 6786500 Al Mushrif 02 4432424 Baniyas 02 5821100 Muroor 02 4481858 Khalidiya 02 6665757 Al Ain 03 7667700 Al Ain Main Street Ali Ibn Abi Tailb St. 03 7669968 Ajman 06 7422440 Shk Humaid Bin Abdul Aziz Street, Near Ajman Museum 09 2221100 Fujairah Sh. Hamad Street Ras Al Khaimah 07 2361644 King Faisal Street.

Al Nakheel RAK 07 2281695 Sharjah Main 06 5684366 Bank Street, Rolla King Abdul Aziz Street 06 5730883 Dhaid 06 8822899 Main Street, Sh. Arsan Hameed Bldg., Dhaid Dibba 09 2444230 Kalba 09 2777430 Kalba City Khorfakkan 09 2385295 Umm Al Quwain 06 7666948 King Faisal Street, Next to New Souk

Merill Lynch International & Co.C.V Representative Office Dubai (04) 3975555 Business Center Building, Khalid Bin Walid Street P.O. Box 3911, Dubai Telefax Executive Director

04-3975252 Mones Bazzy

Tel 04 2223333 Fax 04 2226061

BANKING AND BUSINESS REVIEW

November 2009

51

NATIXIS

Mina Road

02 - 6767665

Tel 04 7026777 Fax 04 7026820

Al Alin Al Ain Clock Tower Al Ain Al Ain Cement Factory Al Ain International Airport Al Ain Defence Al Sanaiya Al Hayer Al Ain Mall

03 - 7642400 03 - 7516900 03 - 7828060 03 - 7855511 03 - 7688824 03 - 7213222 02 - 7322400 03 - 7519900

Head Office: Abu Dhabi 02 - 6111111 One NBAD Tower, Khalifa St., P.O. Box 4, Abu Dhabi Telex 22266/7 MASRIP EM History: Established in 1968 H.E. KHALIFA MOHAMED AL KINDI Chairman H.E. DR. JAUAN SALEM AL DHAHIRI Deputy Chairman MICHAEL H. TOMALIN Chief Executive ABDULLA MOHAMMED SALEH ABDULRAHEEM GM & Chief Operating Officer SAIF ALI MOHAMED MUNAKHAS AL SHEHHI GM Domestic Banking Division QAMBER ALI AL MULLA GM International Banking Division ABHIJIT CHOUDHURY GM & Chief Risk Officer JOHN GARRETT GM & Chief Audit & Compliance Officer

Ajman Ajman

06 - 7422996

Dubai Deira Dubai Side Jebel Ali Sh. Zayed Road Al Qusais Jumeirah Mall of the Emirates

04 - 2226141 04 - 3599111 04 - 8815655 04 - 3433311 04 - 2674176 04 - 3499001 04 - 3413888

Fujairah Fujairah Dibba

09 - 2222458 09 - 2444223

Ras Al Khaimah Al Nakheel Ras Al Khaimah

07 - 2281753 07 - 2334333

Sharjah Al Bourj Avenue Sharjah Al Falah Camp Office Al Dhaid Khorfakkan Kalba

06 - 5695500 06 - 5721111 06 - 5385969 06 - 8822929 09 - 2385250 09 - 2772112

Umm Al Quwain Umm Al Quwain

06 - 7660033

Dubai Branch DIFC Gate Village Building No. 8, 5th Floor P.O Box 33770 Email: natixis@emirates.net.ae Website: www.natixis.fr Philippe Petitgas CEO

National Bank of Abu Dhabi

Abu Dhabi Main Branch 02 - 6111111 Khalidiya 02 - 6666800 Dept. of Social Services & Commercial Buildings 02 - 6346673 ADCO 02 - 6672642 ADMA 02 - 6263225 ADNOC 02 - 6669143 Abu Dhabi Municipality 02 - 6744749 NPCC 02 - 5549282 ZADCO 02 - 6768821 HILTON 02 - 6812280 Abu Dhabi International Airport 02 - 5757303 Sheikh Rashed Bin Saeed Al Maktoum Road 02 - 6419800 Abu Dhabi Mall 02 - 6452200 Arabian Gulf Road 02 - 4478878 Baniyas 02 - 5831625 Bateen 02 - 6658332 Between The Two Bridges Area 02 - 5589446 Corniche 02 - 6220300 Dalma Island 02 - 8781240 TAMM 02 - 8945528 Das Island 02 - 8731099 Liwa 02 - 8822388 Madinat Zayed 02 - 8846146 Government Complex 02 - 8945428 Al Mirfaa 02 - 8836506 Al Ruwais 02 - 8776343 Al Muroor 02 - 4481918 Mussafah 02 - 5553357 Dept. of Social Services & Commercial Buildings (Mussafah) 02 - 5520681 Mussafah Municipality 02 - 5540300 Industrial City of Abu Dhabi 02 - 5501125 Al Salam St. 02 - 6442900 Al Shahama 02 - 5632411 New Al Shahama 02 - 5635695 Abu Dhabi Municipality-Shahama 02 - 5631385 Sweihan

03 - 7347919 Marina Mall 02 - 6816002 Al Etihad 02 - 6111111 Emirates Palace 02 - 6908900 National Exhibition Centre 02 - 4494996

52 BANKING AND BUSINESS REVIEW

November 2009

National Bank of Bahrain Abu Dhabi Khalaf Bin Ahmed Al Otaiba Building, Sh. Hamdan Street P.O.Box 46080 Email: nbbbr96@emirates.net.ae Website: www.nbbonline.com Farouk Khalaf Ingersoll Ramalingam

UAE Country Manager Manager Credit

Tel 02 6335288 Fax 02 6333783

02 6335299 02 6311248

National Bank of Dubai Dubai Tel 04 2222111 Head Office Baniyas Street, Deira Fax 04 2283000 P.O. Box 777 Email: contactus@nbd.co.ae Website: www.nbd.com

History: Established in1963 as National Bank of Dubai Limited. In 1994 name was changed to National Bank of Dubai.

R. Douglas Dowie Joyshil Mitter Alex Richardson Leslic Rice Abdul Shakoor Tahlak Ghanim Bin Zaal Ali Al Najjar Suvo Sarkar Rajesh Thaper Faranak Foroughi Husam Al Sayad G. Krishnamoorthy Sue Evans Alan M. Smith A. Chandran Walid El Masri Rashmi Malik Abdul Fattah Sharaf Mohamed Al Neaimi Ali Kaitoob P.S. Sastry Hesham Qassimi

CEO CFO COO CRO CM - Intl.

CM - Business Development CM - Liability Head of Retail Head Of Corporate Head of TPO Head of HR Treasurer Head of IS&T Head of Group Audit Head of BPQM Head of Corp Comm Head of Strategy GM NFS GM Aqarat Head of Dist. Retail SM CEO’s Office Divisional Manager Corporate Banking

Abu Dhabi P.O. Box: 386 Ajman P.O. Box: 712 Ajman Archives Al Mizhar Al Ain P.O. Box: 16122 Burjuman Centre Bullion Convention Centre Branch Dubai Central Fruit & Vgtbl. Mkt Branch Al Awir Dubai International Airport Dubai International Airport Pay Office Dubai Internation Airport Dubai Internation Airport Dubai Internation Airport Dubai Internation Airport Dubai Internation Airport Dubai Media City Pay Office Deira City Centre Dubai Airline Centre Dubai Airport Free Zone Dubai Courts Dubai Media City Pay Office Emirates Tower Fahidi Emirates Tower Emirates Tower Fahidi Direct Banking Fujairah Branch P.O. Box: 1744 Hamriya Hatta Ibn Battuta Mall Branch Ittihad Road Jumeirah Branch Jebel Ali Main Office Maktoom Branch Malleq Emirates Branch Muhaissnah Branch Nadd Al Shiba Oud Metha Branch (Ex-Gulf Tower Branch) Ras Al Kaimah P.O. Box : 1932

Tel : 02 6394555 Tel : 06 7456555 Tel : 06 7444606 Tel : 04 2641221 Tel : 03 7644345 Tel : 04 3555222 Tel : 04 2284757 Tel : 04 3320808 Tel : 04 3333880 Tel : 04 2200404 Tel : 04 2164946 Tel : 04 2162450 Tel : 04 2166995 Tel : 04 2162452 Tel : 04 2162434 Tel : 04 2162740 Tel : 04 3902007 Tel : 04 2951555 Tel : 04 2952555 Tel : 04 2995550 Tel : 04 3366702 Tel : 04 3030400 Tel : 04 3300133 Tel : 04 3535575 Tel : 04 3530308 Tel : 04 2823400 Tel : 04 3532840 Tel : 09 2233335 Tel : 04 2663189 Tel : 04 8523183 Tel : 04 3685499 Tel : 04 2955600 Tel : 04 3420202 Tel : 04 8816087 Tel : 04 2222111 Tel : 04 2281141 Tel : 04 3410777 Tel : 04 2544545 Tel : 04 3363939 Tel : 04 3370222 Tel : 07 2279888

Fax : 02 6346767 Fax : 06 7456060 Fax : 06 7425883 Fax : 04 2640569 Fax : 03 7668515 Fax : 04 3554455 Fax : 04 2289090 Fax : 04 3320908 Fax : 04 3333870 Fax : 04 2244614 Fax : 04 2244614 Fax : 04 2244614 Fax : 04 2244614 Fax : 04 2244614 Fax : 04 2244614 Fax : 04 2244614 Fax : 04 3908855 Fax : 04 2951525 Fax : 04 2955655 Fax : 04 2995557 Fax : 04 3353906 Fax : 04 3908855 Fax : 04 3300155 Fax : 04 3535575 Fax : 04 3534601 Fax : 04 2823640 Fax : 04 3531443 Fax : 09 2233336 Fax : 04 2690103 Fax : 04 8521051 Fax : 04 3685501 Fax : 04 2955611 Fax : 04 3421112 Fax : 04 8816961 Fax : 04 2283000 Fax : 04 2235456 Fax : 04 3410707 Fax : 04 2544646 Fax : 04 3363788 Fax : 04 3366145 Fax : 07 2279889

Rashidiya Souk Madinat Jumeirah Branch Sh. Zayed Road (Saeed Tower) Sharjah P.O. Box : 21850 Umm Al Quwain P.O. Box : 22 Emirates Tower Umm Suqeim

Tel : 04 2859523 Tel : 04 3686130 Tel : 04 3313183 Tel : 06 5738888 Tel : 06 7656154 Tel : 06 7656152 Tel : 04 3485222

Fax : 04 2854847 Fax : 04 3686195 Fax : 04 3310629 Fax : 06 5733000 Fax : 06 7655151 Fax : 04 3300155 Fax : 04 3482535

National Bank of Oman Abu Dhabi Bin Sagar Towers, Najda Street Tel 02 6348111 / 6323456 P.O. Box 3822 Fax 02 6325027 Ravi S. Khot Country Manager 02 6393028 Salim Al Khanjri Manager - Operations 02 6392535 Minhajuddin Niazi Manager - Consumer Banking &

Business Development 02 6326560 K.K. Gambhir Manager - Corporate Banking 02 6394922

National Bank of Umm Al Qaiwain History: Established in 1982 24/7 Call Centre Number: 600 56 56 56 E-mail: nbuq@nbq.ae Website: www.nbq.ae Sh. Nasser Bin Rashid Al-Moalla Mohamed Abdel Rahim Al Mulla Umm Al Qaiwain Branch NBQ Building, King Faisal Street P.O.Box 800, Umm Al Qaiwain Falaj Al Mualla Branch NBQ Building, Shaikh Zayed Street P.O.Box 11074 Falaj Al Mualla Dubai Branches NBQ Building, Khalid Bin Al Waleed Street P.O. Box 9715 Dubai Deira Branch Opposite Dubai Police Head Quaiter Al Ittihad Street, P.O. Box 8898 Deira, Abu Dhabi Branch Hamdan Bin Mohammed Street (# 5) P.O. Box 3915 Abu Dhabi Mussafah Branch P.O. Box 9770 Abu Dhabi Al Ain Branch Oud Al Touba Street Al Mandoos Roundabout P.O. Box 17888 Al Ain Sharjah Branch King Faisal Street, P.O.Box 23000 Sharjah NBQ Kiosk Sharjah Mega Mall P.O.Box 23000 Sharjah Ajman Branches City Center Branch Ajman City Center P.O.Box 4133 Ajman Masfout Branch NBQ Building Main Street P.O.Box 12550 Masfout, Ajman Fujairah Branch Fujairah Insurance Co. Building Hamad Bin Abdulla Road P.O.Box 1444 Fujairah

BANKING AND BUSINESS REVIEW

Managing Director General Manager Tel: 06 7066666 Fax: 06 706 6677 Tel: 06 8824447 Fax: 06 8824445 Tel: 04 3976655 Fax: 04 3975382 Tel: 04 2651222 Fax: 04 2651333 Tel: 02 6775100 Fax: 02 6779644 Tel: 02 5555088 Fax: 02 5553559 Tel: 03 3751300 Fax: 03 7513500 Tel: 06 5742000 Fax: 06 5742200 Fax: 06 5742200

Tel: 06 7436000 Fax: 06 7436060 Tel: 04 8523377 Fax: 04 8523093 Tel: 09 2232100 Fax: 09 2232220

November 2009

53

Ras Al Khaimah Branch Corniche Al Qawasim Road P.O.Box 32253 Ras Al Khaimah

Tel: 07 2366444 Fax: 07 2364470

Philippine National Bank Dubai Representative Office Room 108, Al Nakheel Bldg., Zabeel Road, Karama Tel 04 3365940 P.O. Box 52357, Dubai, UAE Fax 04 3374474 E-mail: pnbdxb@emirates.net.ae Amroussi Tillah Rasul First Vice President & Regional Representative

Rafidain Bank

Abu Dhabi Al Nasser Street, Glass Bldg.

P.O.Box 2727, Abu Dhabi Salah Mahid Branch Manager

Tel 02 6335882 / 3 Fax 6326996

Tel 04 3313196 Telefax 04 3313960

RAK Bank Ras Al Khaimah Head Office, Oman Street, Al Nakheel Tel 07 2281127 P.O. Box 5300 Fax 07 2283238 E-mail: nbrakho@emirates.net.ae; www.rakbank.ae History: Established in 1976 as The National Bank of Ras Al Khaimah. In 2003, name was changed to RAKBANK H.E. Sheikh Omar Bin Saqr Al Qasimi H.E. Sheikh Salim Bin Sultan-Al-Qasimi Mr. Hamad Abdulaziz Al Sagar Mr. Essa Ahmed Abu Shuraija Al Neaimi Mr. Majid Saif Al Ghurair Mr. Ali Samir Al Shihabi Mr. Yousuf Obaid Essa Mr. Graham Honeybill Mr. Ian Hodges Mr. Anil Sukhia Mr. Steve O Hanlon Mr. Geoff Harman Mr. Jose Braganza Mr. Malcolm D’Souza Mr. Nigel Summersall Mrs. Susan Gardner Mr. Venkat Raghavan Dubai Deira Maktoum Branch Deira Souk Branch Umm Hurair Branch (Bur Dubai) Sultan Business Center ( Dubai Main Branch) Sheikh Zayed Road Branch Emaar Business Park Branch Marina Diamond Branch Al Quoz Branch Al Qusais Branch

54 BANKING AND BUSINESS REVIEW

Tel : 04-3685890 Tel : 06-5746888 Tel : 06-5132666 Tel : 09-2778707 Tel : 09-2371900 Tel : 03-7644222 Tel : 02-6448227 Tel : 02-6666658 Tel : 07-2333744 Tel : 07-2666833 Tel : 07-2448822 Tel : 04-8525999 Tel : 07-2662434 Tel : 07-2351147 Tel : 07-2281127

Sharjah Islamic Bank

Royal Bank of Canada

Dubai Representative Office API World Tower, Suite 1002, Shk. Zayed Road, P.O. Box: 3614.

Umaima Zaman senior manager Ashwani.k.Dewitt senior manager Global Private Banking Ashish Anand Chief Representative

Ibn Battuta Mall Branch Sharjah Sharjah Main Branch Sharjah Industrial Area Kalba Branch Khorafakkan Branch Al Ain Al Ain Branch Abu Dhabi Abu Dhabi-Tourist Club Branch Khalidiya Branch Ras Al Khaimah RAK Town Branch Sha’am Branch Badr Branch Al Mannei Branch Al Rams Branch Al Dhait Branch Al Nakheel Branch

Chairman Director Director Director Director Director Director General Manager Head of Personal Banking Head of Corporate Banking Chief Operating Officer Head of Internal Controls Head of Credit Head of Treasury Chief Internal Auditor Head of Human Resources Head of Finance Tel : 04-2248000 Tel : 04-2248000 Tel : 04-2248000 Tel : 04-2248000 Tel : 04-2248000 Tel : 04-2248000 Tel : 04-2248000 Tel : 04-2248000 Tel : 04-7058444

November 2009

Mohammed Abdalla Chief Executive Officer Ahmed Saad ibrahim Chief Operating Officer Mohammed Rizwan Chief Risk Officer

Saeed M Ahmed Al Amiri Head, Investment Group Ossama Salah El Din Head, Retail Banking G . Ramkirshinan Head of Coroprate Banking Group Hussam A. Abu Aisheh SVP-Chief Internal Audit

Mohammed Ishaq Chief Dealer Mohamed Azmeer Head of Credit Division

Eman Jasim Sajwani Head of Human Resources Group

Myron Britto Head, nformation Technology Div.-CIO

Sufyan Maysara Head of Shariaa Supervision Divison Branches Main Branch - Al Brooj Avenue Mohammed Yousif

King Faisal Street Branch Abdul Salam Al Ali

Ladies Branch

Laila Ali Salem

American Unversity Branch Mohd Mousa Ali

Al Dhaid Branch

Khalid M. Ajmani

Industrial Area Branch Waleed Abdul Qadir Sharjah Expo Branch Jassim Al Awadi

Sharjah Buhaira Branch Osama Ahmed AlSalman

Khorfakhan Branch Yousif M. Abdullah Dibba Branch Ali Al-Abdouli Kalba Branch Abdullah Bin Hikal

Fujairah Branch

Nawal Mohamed AlMaghribi Dubai Branch Mohamed Ibrahim Alghufili

Sheikh Zayed Branch Maisoon Zainudin

Al Twar Branch

Maha AlBanna Abu Dhabi Branch

Thomas P.Y. Al Ain Branch Majid Sha’abaan

06-5115116 06-5115118 06-5115172 06-5115000 06-5115339 06-5115111 06-5115153 06-5115151 06-5115319 06-5115170 06-5115444 06-5115213 06-5115121 06-5746805 06-5746807 06-5585789 06-8829414 06-5397623 06-5992502 N/A 09-2387490 09-2442601 09-2774204 09-2244339 04-2698322 04-3217543 04-2638335 02-6224166 03-7513200

Shuaa Capital PSC Head Office Tel: 04 3303600/ 04 3199778 Emirates Towers Hotel, Level 7 Fax: 04 3303550 P.O. Box: 31045, Dubai, UAE. Website: www.shuaacapital.com Iyad Duwaji CEO Abeer Ayash Marketing and PR coordinator

Societe Generale Dubai DIFC Gate Village, Bldg. 6, 4th Floor

Tel.: 04 4257500

Sheikh Zayed Road, Dubai Fax: 04 3653170 Website: www.socgen.com Alain L. Tave Chief Regional Representative

Standard Bank Plc - Dubai Branch (DIFC) Dubai Emirates Tower, Office-16 B Tel 04 3300011 P.O. Box 504904 Fax 04 3300169 Website: www.standardbank.com Jeffrey Rhodes General Manager 04 3300164 Kate Lunjevich Head of Compliance & Operations

Standard Chartered Bank Head Office: United Kingdom Dubai Main Branch Tel 04 3520455 Head Office: Al Fardan Building, Fax 04 3526679 Mankhool Road, Bur Dubai P.O. Box: 999, Dubai - United Arab Emirates www.standardchartered.com/ae/ Phone Banking: +9714 3138888 (24 hours) Dubai Branch P. O. Box 999, Al Mankool Road, Dubai , UAE 04-3599550 Deira Branch P. O. Box 1125, Al Nasr Square, Dubai, 04-5085300 Gold Souq Branch P. O. Box 64555, Gold Souq, Dubai , UAE 04-2262699 Jebel Ali Branch P. O. Box 16920 , Jebel Ali, Dubai , UAE 04-5085200 Sharjah Branch P. O. Box 5, Al Boorj Avenue, Sharjah , UAE 06-5916100 Hamdhan Branch P. O. Box 240,Al Fardan Tower ,Abu Dhabi, UAE 02-6165600 Istiqlal Branch P. O. Box 241, Istiqlal Street, Abu Dhabi UAE 02-6165400 Al Ain Branch P. O. Box 1240, Near Clock Tower, Al Ain, UAE 03-7056800 Dragon Mart Branch P. O. Box 4166, Dragon Mart mall, Dubai, UAE 04-5085260 Emaar Business Park Branch P. O. Box 103669,Building 3 ,Dubai , UAE 04-5085255 Wealth Management Center P.O Box 999, Jumeira Beach Road, Dubai UAE 04-5085706

The Housing Bank for Trade & Finance Abu Dhabi P.O. Box 44768

Muhanad Habashneh Representative

Dubai Creek Tower, Baniyas Road, Deira Tel 04 2284080 P.O. Box 29885 Fax 04 2284070 Hamed Hassouna Chief Representative GCC & Yemen

UBS AG

Senior Representative

Dubai Creek Tower, Office 17A, Baniyas Road, Deira Peter Schaer Senior Representative DIFC Gate Village, Bldg. No. 6, 5th Floor Sheikh Zayed Road P.O Box 506542 Per Larsson Senior Representative

04 2240044 04 2220006 Tel.: 04 3657150 Fax: 04 3657191

Union National Bank Abu Dhabi Head Office, Salam Street, P.O.Box 3865, Abu Dhabi Website: www.unb.ae History: Established as a Public Joint Stock Company in 1982 Nahyan Bin Mubarak Al Nahyan Chairman Mohammad Nasr Abdeen Chief Executive Officer Abu Dhabi Corniche City Centre Najda Hazzaa Khalidiya Adgas Booth Musaffah Shahama Baneyas Al Dhafra/Madinat Zayed Al Muroor Al Ain Sh. Khalifa Street Al Jimi Dubai Main Branch, Deira Al Maktoum Street Khalid Bin Al Waleed Road Al Bustan Jebel Ali Sheikh Zayed Road/Jumeira Rashidiya

Tel 02 6741600 Fax 02 6786080

Ajman Central - Emirates Post Fujairah Ras Al Khaimah Sharjah King Abdul Aziz

Tel 02 6268855/6270280 Fax 02 6271771

Union de Banques Arabes et Francaises UBAF

Abu Dhabi ADNIC Bldg., 5th Floor, Sh. Khalifa Street P.O.Box 3744 Website: www.ubs.com

Roger Leitner

02 632 1600 02 627 3471 02 632 4981 02 641 2288 02 635 2511 02 627 0611 02 555 9111 02 563 4600 02 582 1886 08 884 8484 02 444 8384 03 7644551 03 7626240 04 2211188 04 2232266 04 3516444 04 2636388 04 8810999 04 3329911 04 2857686 06 7425552 09 2222747 07 2286600 06 5686141 06 5746161

United Arab Bank General Management & H.O. Tel 06 5733900 Sh. Abdulla Bin Salim Al Qassimi Building, Al Qasimia St., Sharjah Fax 06 5733906 E-Mail Address uarbae@emirates.net.ae Website www.uab.ae History: Established 1975 Bertrand Giraud Awni Alami Gibert Hie Arif Premdjee

General Manager Dy. General Manager Asst. GM-Corporate & Retail Asst. GM-Admin. & Finance

06 5733900 06 5733900 06 5733900 06 5733900

Tel 02 6275024 Fax 02 6272752

BANKING AND BUSINESS REVIEW

November 2009

55

United Bank Limited Dubai Gargosh Bldg, Khalid Bin Waleed Street P.O. Box 1367, Dubai Email: ublgmuae@emirates.net.ae Website: www.ubl.com.pk Wajahat Husain Head of Middle East Maruf Ahmed General Manager UAE

Tel 04 3552020 Fax 04 3514525

Wachovia Bank National Assoc.

Representative Office Dubai The Atrium Centre, Khalid Bin Waleed Street, Bur Dubai P.O. Box 53089 Head Office: USA

64 BANKING AND BUSINESS REVIEW

04 3556244 Fax 3557117

November 2009

J.Kennedy Thompson Michael P. Heavener Dubai Branch: Chafic Haddad Carol Hampson

Chairman & Chief Executive Officer International Division Vice President & Regional Manager Customer Services Representative