Banking & Business Review October 09

DH 25 October 2009

NEW FRONTBENCHERS Relocations help to hold rents Major economic policy reform Beyond oil market downturn

For a ‘Dunia’ of difference

Rajeev Kakar, CEO, Dunia Finance

Vol. VI. No. 44 October 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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Account Manager Peter Macwan ACCOUNTS Biju varghese Circulation Supervisor

Printing

peter@sterlingp.ae biju@sterlingp.ae Ibrahim A. Hameed

Rediscovering banking

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he aftermath of the financial crisis has forced banks to change their ways, not only in terms of lending and other banking practices, but also in deciding priorities. Debt recovery, formerly an important but low-profile activity, has now moved over the front benches. For, they have all realized to that a bird in hand is more than worth two in the bush.

For some banks the issue is so serious that they have to content with three-fourths of their total credit disbursements as gone. That makes the recovery of even very small amounts a creditable achievement.

Things have come to such a pass that sometimes banks are spending more money following up the recovery process than they are able to get back through the action, because the amount involved may be so small.

The lack of credit information that is generally available in markets with well-established credit bureaus makes the banks’ task even more tedious.

Naturally, the topmost priority for them is to get back the money from the market and no effort is being spared in this process. As skips become a routine part of banking business in the country, the institutions are honing their skills in perfecting the art of recovery.

This has meant a whole new look at the recovery process and sometimes entire redeployment of the staff for optimum results. At the same time there is no escape from the tormenting thought that a little more caution in the initial stages would have spared them a lot of trouble.

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CONTENTS

12 COVER STORY

New bank front-benchers Increase in number of skips worries banking sector

8 INTERNATIONAL

Crisis: one year on Companies are settling down for a less comfortable ‘new normal’

11 FUNDS

Investment communities skeptical Two-thirds of fund managers believe crisis will continue

2 BANKING AND BUSINESS REVIEW

October 2009

20 ECONOMY

Tight credit hampering recovery Banks competing for deposits to bridge funding gap

24 SNAPSHOT

For a ‘Dunia’ of difference UAE’s newest financial services company promises differentiated offerings

26 REAL ESTATE

Relocations help in rents holding Movements to Dubai from Abu Dhabi and Sharjah offset population decline

Developers have ‘learnt their lessons’

36 FOREX

Too early to rejoice

38 FINANCE Remittance industry hit by recession Saudi Arabia remains home to region’s biggest remittance business

40 OPINION A major economic policy reform UAE Company Law changes to lower cost of doing business

Proper risk management of utmost importance

44 FROM THE GATE State Bank of India launches corporate banking 46 ENERGY Beyond oil market downturn

BANKING AND BUSINESS REVIEW

October 2009 3

ROUNDUP

Singapore continues to be world’s Top International Meeting City

S

ingapore has consolidated its reputation as the world’s preferred business events destination by clinching the top spot in the ‘Top International Meeting City’ category in the Union of International Associations (UIA) 2008 Global Rankings for the second consecutive year.

In the UIA’s International Meeting Statistics 2008 report, Singapore also moved one notch up from 2007 to third position in the ‘Top International Meeting Countries’ category behind USA (1st) and France (2nd).

The city-state also overcame stiff competition for the Asia rankings, securing the title as Asia’s top country and city for meetings for the 25th consecutive year.

The Union of International Associations (UIA) – founded in 1907 – is an independent, non-governmental research institute and documentation centre whose key activities include consolidating statistics on international organisations and their international meetings.

“This ranking underscores Singa-

4 BANKING AND BUSINESS REVIEW

pore’s reputation as an exchange capital of the world where people, ideas and technology converge to generate business success. These accolades come at an opportune time as they put Singapore in a strong position to further expand its share of the global business events market by partnering with MICE industry partners to attract and develop successful business events centered around major growth industries in Singapore and the region,” said Jason Ong, Area Director for Middle East and Africa, Singapore Tourism Board.

Singapore hosted 637 meetings in 2008 that met UIA’s qualifying criteria – a 36 per cent increase over 2007.

Notable meetings include the International Thalassaemia Conference 2008, ISNCC 15th International Conference on Cancer Nursing 2008 and the Asia Petrochemical Industry Conference.

In 2004, Singapore stood at a respectable 10th place in the ‘Top International Meeting City’ category.

In 2005 it climbed to 8th place, and jumped to 4th place in 2006. In 2007

October 2009

it rose to first place, with almost 30 per cent more meetings than the city in second place. In 2008 it not only maintained its position in first place, it has increased its margin to 50 per cent more meetings than the second-ranked city, according to Jcques de Mevius, Secretary-General, UIA. Singapore is looking forward to host a number of high profile events this year including the FDI World Dental Congress, the second edition of ITB Asia and the Asia Pacific Economic Cooperation (APEC) 2009 meetings. In addition, top tier international events such as the FORMULA 1 SingTel Singapore Grand Prix and the inaugral F1 Rocks Singapore concerts are adding more buzz and dynamism to the destination.

Next year business events organisers will have even more options with new developments, such as the two new Integrated Resorts, Marina Bay SandsTand Resorts World at Sentosa, and Gardens by the Bay – Singapore’s second Botanical Gardens – , which will collectively entrench Singapore as a compelling and must-visit destination.

Committed employees fastest to be promoted

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mployees that are hard-working and have a strong work ethic are likely to be promoted the fastest within an organization, according to the new employer online poll series conducted by Bayt.com, with 30 per cent of employers agreeing that those committed to their work are likely to be most eligible for promotion. Leadership ability was also found to be a very desirable trait in an employee when it came to deciding which staff members to be promoted, with 19 per cent of employers agreeing natural leaders are the fastest to move up the organisation’s career ladder.

Surprisingly, possessing a high IQ was considered less important among the employers surveyed, with just 6 per cent agreeing that the most intelligent employees are promoted fastest, and contrary to popular belief, visibly putting in long hours does not guarantee a promotion; just 8 per cent of employers agreed that those who stay after hours will be promoted faster than those who don’t.

The ‘Job seeker promotability’ July online poll series sought to understand from employers how they undertake the process of promoting employees, and what qualities they look for when assessing an employee’s ‘promotability’.

When asked about the strategy they normally follow when conducting the promotion process, almost a third of all employers-- 32 per cent-- stated they look at an employee’s proven deliverables and make their decision based on these indicators. Eleven per cent opt for a slightly unorthodox tactic and stretch their employees to see who performs best under pressure choosing the ‘winner’ for promotion.

Furthermore, 4 per cent of employers conduct a rigorous 360-degree performance appraisal with their staff; another 4 per cent invite employees to formally apply for the higher position, while a further 4 per cent of employers conduct random interviews with employees to see who fits in best with the higher position. However, another third of employers combines a mix of each of these factors as their strategy for promoting employees.

The surveyed employers also acknowledged the problems inherent in the promotion process: 44 per cent of employers said that the biggest mistake made by employers when deciding upon a promotion is not considering leadership skills sufficiently. Another 13 per cent said that allowing just one manager to make the promotion decision is the biggest mistake in the process, while another 13 per cent agreed that not discussing the matter of promotion sufficiently with the concerned employee is an issue. Just 6 per cent of employers agreed that relying solely on the observations of the employee’s direct manager for a promotion decision was problematic, and another 6 per cent said making a promotion decision based on an employee’s performance on a specific project was an issue.

There are, naturally, a number of factors which serve to hinder an employee’s chances of gaining a promotion. The biggest source of chagrin among the surveyed employers was weak leadership skills in their employees, which caused a grievance to over a fifth of employers. Bad work ethics and laziness, unsurprisingly, also feature as a significant barrier to an employee’s chances of promotion – as agreed with by 18 per cent of employers.

Furthermore, 15 per cent of employers stated that inability to work as part of a team or being too independent at work, and weak interpersonal skills, were also major hindrances to chances of promotion.

Interestingly, lack of creativity or problem solving skills, and weak technical skills were less of a hindrance to an employee’s chance of promotion, according to 12 per cent and 9 per cent of employers respectively. The data suggests that employers might be willing to work on nurturing technical skills and creativity traits via training and development of their employees - especially if they have other strong qualities, possibly because in practice, troublesome attitudes are more difficult to change and improve than actual key skills.

Potential promotability is also considered by employers from as early on as when they make their hiring decisions.

The results showed that 28 per cent of employers look for strong people skills in their potential recruits, while 20 per cent look for signs of good technical skills and ability. Another desirable quality that 16 per cent of employers look for is commitment and loyalty perhaps from work experience in previous organisations or hobbies/ activities undertaken in a job seeker’s spare time.

Desirable - but not wholly necessary - traits that employers look for in potential new staff, at 8 per cent ach, are a strong work ethic, a good character and integrity, as well as a track record of success.

Data for the ‘Job seeker promotability’ poll series was collected online between the period of 13th July and 17th August 2009, with respondents represented by employers across the Middle East.

BANKING AND BUSINESS REVIEW

October 2009 5

ROUNDUP

Sahba Hadipour joins Barclays Wealth

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arclays Wealth announced the appointment of Sahba Hadipour as Director to its International Private Banking team in the Middle East. He will report into Fawaz Baba, General Manager of the Dubai International Private Banking Office.

Based in the Dubai International Financial Centre, Sahba Hadipour will be a private banker focusing on the High Net Worth and Ultra High Net Worth markets in the UAE, the bank said in a statement. Within his new position, Hadipour’s experience with private equity along with his knowledge of the wealth management industry in the region will compli-

ment the full array of the Barclays Wealth value proposition to the UAE market, it said.

Prior to joining Barclays Wealth, Hadipour was a Director, Private Equity and Wealth Management for CIC Holding (Invesco Holding) where he developed strategic relationships with UHNWI, SWF and institutional investors. In his position, Hadipour created and developed the architecture and formation of several private equity funds in the real estate, technology and oil & gas sectors. Prior to that, Sahba was with Vertical International and Coutts de Lisle Investments where he held a variety of roles.

GCC Investor Confidence Index up

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fter the dip last month in the confidence index, the GCC Investor Confidence Index is moving in a more positive direction, Shuaa Capital said in a report. Although only a 2.7% gain, it is nonetheless a good sign and the small change is not surprising given that August is traditionally a quiet month, it pointed out.

SHUAA Capital’s GCC Investor Sentiment Report is compiled with contributions from international and regional institutional investors and has been designed to provide the global investment community with a benchmark of investor confidence for GCC countries and track changes in investor behaviour over time.

The results of the August 2009 Report showed that after the dip last month in the confidence index, there is again a move in the more positive direction. Although only a 2.7 per cent gain, it is nonetheless a good sign, the report pointed out.

Contributing most to the positive movement were the UAE and Qatar. The UAE Investor Confidence Index was the biggest gainer in the GCC, up 4.3 per cent to 118.8 points. This makes up for some of July’s losses after the index dipped to 113.9 points. Despite the improvement, the index still lags behind June’s peak of 123.8 points. Driving the UAE Index this month was improving sentiment towards the current state of the

6 BANKING AND BUSINESS REVIEW

October 2009

UAE economy. Positive responses doubled to 16.9 per cent with a similar level of negative and neutral responses at 38.5 per cent and 33.8 per cent respectively.

The significant improvement in the overall GCC Investor Confidence Index was largely driven by a positive shift in the balance of investors’ perceptions of current regional economic conditions. In August this figure moved to 1.5 per cent from -15 per cent in the previous month.

The six month investor outlook for the GCC economy remains positive, with a balance of 56.9 per cent, which is a slight improvement on the previous month’s 55.3 per cent.

The GCC is now ahead of both BRICs [Brazil, Russia, India, China] and Global Emerging Markets, who both recorded a lower figure of 49.2 per cent, the report pointed out.

However, it added that investors still think stock markets across most of the GCC remain undervalued with the Abu Dhabi Stock Exchange being the most undervalued with a balance of respondents of 55.4 per cent. Saudi Arabia follows closely behind at 46.2 per cent and is considered even more undervalued than last month as is also the Doha Stock Market with a balance of 44.6 per cent. Nasdaq Dubai is still seen as undervalued but to a lesser degree with a balance of 16.9 per cent, a 9.8 per cent drop. The Dubai Financial Market and the Omani stock exchange are on a par at 33.8 per cent, which is a strong improvement for both on the previous month.

Sukuk market continues to progress: S&P

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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, Standard & Poor’s Ratings Services said in a report.

“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.

The report noted that 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.

Islamic banks seen unaffected by crisis

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lobal financial crisis has failed to have any impact on Islamic banking because the principles of Islamic banking did not permit speculative economic activity such as dealing in derivatives, according to Adnan Ahmed Yousef, the President and CEO of Albaraka Banking Group and the head of the Union of Arab Banks.

Terming Islamic banking as a remarkable success story in the backdrop of the general gloom in the financial sector, Yousef said Albaraka Group not only remained unaffected by the financial crisis, but also managed to increase profits this year.

Though the end of financial crisis had already begun, it will take a long time to get out of the economic crisis.

“Proactive government initiatives are a precondition to get over the financial crisis. The developed countries must listen to Asian countries to avert this kind of situations in future,” he said.

Speaking of the performance of banks in the Gulf against the backdrop of the crisis, Yousef said the consolidat-

ed balance sheet of GCC banks would prove beyond any shadow of doubt that the impact of the crisis on banks in the region had been minimal. “But that does not mean we remain isolated from the rest of the world. It is indeed possible for the GCC countries to become more influential internationally.

GCC will actually be the fifth major economic block in a few years provided they implement a common currency system and consolidated economic activity across the region further,” he explained.

Appreciating the development strategy followed by Dubai, Yousef said the emirate has achieved in 10 years what most Arab countries failed to achieve in 50 years. “One major factor that sets the UAE apart from most other countries in the region is that it has allowed unfettered access for foreign capital.

The way the Central Bank proactively intervened in the UAE to fight the impact of the financial crisis was also a remarkable example of the UAE’s farsightedness,” he explained.

Yousef said the central banks across

the world should exchange information about corporate debts to avoid future credit crises. “It is important that the debts of corporate entities be made globally public in order for banks to avoid giving risky loans. This is something very easy to implement as all central banks have the information at their disposal,” he pointed out.

Correction The previous issue of the magazine had wrongly stated that Al Futtaim motors represents Toyota, Honda, Volvo, Chrysler, Jeep and Dodge under its umbrella along with Automall. The company clarifies that Al Futtaim Motors represents Toyota, Lexus, Hino and BT in the UAE while Trading Enterprises, which is a completely different company, represents the other brands. Both Trading Enterprises and Al-Futtaim Motors are under the Al-Futtaim Automotive umbrella.

BANKING AND BUSINESS REVIEW

October 2009 7

INTERNATIONAL

Companies settling down for a less comfortable ‘new normal’, reveals McKinsey global survey

Crisis: One year on

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‘new normal’ is settling in for many companies, an environment less comfortable than the one they knew in the pre-crisis world, most responses in a McKinsey Global Economic Survey results completed in September have revealed.

Most companies are still cutting costs, with a third of all respondents saying that their companies are in crisis. What’s more, executives remain skeptical about the economic health of their countries; a majority say that governments should continue supporting economies in the near term, the leading global management consultancy said in a report titled ’The Crisis: One Year On’.

A year after the global economic system nearly collapsed, many compa-

8 BANKING AND BUSINESS REVIEW

nies are finally finding ways to increase profits under the new economic conditions, the survey showed. But almost as many expect profits to continue falling, and executives also indicate that their broader economic hopes remain fragile. Many expect more government involvement in economies and industries over the long term.

Some companies have moved beyond merely coping with the crisis and are once again actively planning for the long term. McKinsey reports that over the past 12 months, the respondents to its economic conditions surveys have said that their companies are cutting costs, reducing capital investments and headcounts, and making plans for weeks or months, not years—all in all, hunkering down to survive the worst economic shock in decades.

October 2009

Now, for the first time in a year, more respondents expect their companies’ profits to rise than fall in the near term. Product development and long-term planning are high priorities for many companies, and most are optimistic about their prospects in the longer term, the results showed.

Overall, the responses indicate that a ‘new normal’ is settling in—for many companies, an environment less comfortable than the one they knew in the pre-crisis world. Most are still cutting costs, and a third of all respondents say that their companies are in crisis.

What’s more, executives remain skeptical about the economic health of their countries; a majority say that governments should continue supporting economies in the near term.

According to the report, in the long-

er run, many executives expect the globalization of financial and other markets to resume after slowing notably in 2009. They also foresee additional significant changes in their industries and economies over the next five years, including a stronger government role in both. Nearly three-quarters of the executives expect their companies to be in a stronger position in five years than they were before the crisis. The executives also think that their industries will be more consolidated and innovative—but will grow more slowly.

McKinsey points out that after reaching a nadir in January, the expectations of respondents for corpo-

zone have consistently been gloomiest about their economic situation and outlook. But the pattern for expectations is essentially the same in all regions, adding to the evidence from our surveys and many other sources that even the present crisis hasn’t fundamentally disconnected the world’s economies, the report points out.

rate profits and their national economies turned sharply higher in June.

Since then, the expectations have risen strongly and consistently, in tandem with stock markets.

Differences in the hopefulness of executives are striking on the regional level, however. The crisis started in the United States, and executives in North America have consistently indicated that it will end sooner than executives elsewhere expect. Those in the Euro-

Anxious hope

though from a very low base. And in the past six weeks, expectations have risen markedly: 40 per cent of the respondents now think GDP will rise in 2009 (compared with 26 per cent six weeks ago), and 13 per cent expect preSeptember 2008 GDP levels to return in 2010.

But, according to the report, a major-

A year after the global economic system nearly collapsed, many companies are finally finding ways to increase profits under the new economic conditions

Nineteen per cent of respondents around the world—and 28 per cent of those in Asia’s developed economies— said that an economic upturn has already begun. McKinsey says each economic conditions survey since March has shown an increase in the hopes of executives for their national economies. As stock markets continued to climb over the summer, expectations for these economies rose quickly, too,

ity of the executives don’t expect GDP to rise soon, and the responses also suggest other indicators of economic anxiety: 54 per cent, for example, say that governments should scale back— but not stop—their support for economies. The report notes that this support for government action doesn’t vary by industry or by whether a respondent’s company is currently in crisis, indicating that the economic anxiety of executives goes beyond any immediate need

BANKING AND BUSINESS REVIEW

October 2009 9

for help for their own companies. This position is consistent with the executives’ overall positive views, reported in past surveys, of the role government has played so far in the crisis.

The anxiety of the executives is also highlighted by the fact that a plurality—42 per cent—of them still think ‘battered but resilient’ is the best description of the economy over the next several months. This finding suggests that the respondents expect a long, slow recovery. The next most frequently chosen description (31 per cent) of the economy is even less hopeful: ‘stalled globalization’. Only 20 per cent expect a fairly quick recovery. Executives say that their views are most influenced by the GDP growth rates of their countries. Beyond that, those with different outlooks are influenced by very different indicators: those who foresee a quick recovery, for instance, are likelier to focus on consumption, others on unemployment McKinsey says many executives are hopeful about their companies on several fronts. Expectations for profits are significantly brighter than they were six weeks ago, and expectations for customer demand are notably brighter.

The share expecting that their companies will increase the size of the workforce over the next six months has risen to 26 per cent, equaling—for the first time in a year—the share that expect it to decline.

The top current priorities of companies are a mix of short- and long-term moves, including cutting costs, developing new products, and working to ensure that organizations are flexible enough to respond to changing economic conditions. Although threequarters of the respondents’ companies are cutting costs and most will continue to do so, fewer than half identify cost cutting as a top priority. Equal shares report that their companies are restructuring to position themselves for growth and to reduce costs.

World in five years

Respondents from almost three-quarters of the companies expect them to be in a stronger competitive position five years from now than they were before

10 BANKING AND BUSINESS REVIEW

Executives remain skeptical about the economic health of their countries, with a majority favouring continued government support for economic recovery in the near term September 2008. Respondents who expect their companies to be stronger in the long term are likelier than others to say that they are focusing on flexibility, new products, and long-term planning and that their industries will consolidate. One source of competitive advantage may therefore be the elimination of weaker competitors.

The results showed that these respondents are also likelier than others to expect their industries to become more innovative. Indeed, innovation as a response to the crisis is a consistent theme of this survey, and more than half of all respondents say that innovation is more important to growth than it was before the crisis. Interestingly, this is consistent with a finding from January, its low point, when executives said that governments could be most helpful to industries by supporting innovation, the report notes.

More broadly, even though the crisis has slowed many trends related to globalization and raised many questions about the value of increasing economic integration, economies clearly are still more linked than not, and most respondents to this survey expect the links to increase—along with the role of government.

Executives are far more hopeful that

October 2009

globalization will intensify than they were at the low point of the crisis. Five years from now, a much larger share of executives expect more integrated financial markets and more extensive global operations and international trade than expect the opposite. Fortynine per cent of respondents now expect greater financial-market integration; when we asked a similar question, in March 2009, only 35 per cent did.

But the survey found these hopes to be tempered: there is no single area of globalization that a majority of executives expects will intensify. Furthermore, 44 per cent believe that the commitment to free-market economics will be lower than it was before the crisis, though most expect little social or political backlash against the free-market system.

At the national level, majorities of executives expect that five years from now, governments will be more involved in the economy as a whole and that the financial sector will continue to see increased regulatory constraints.

Just under half also expect tighter credit and a decreased rate of GDP growth. A slim majority of executives expect consolidation in their industries; many also foresee more extensive innovation and slower growth in their industries.

FUNDS

Investment community sceptical Survey finds nearly two-thirds of fund managers believe crisis will continue

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espite improving economic indicators, senior fund managers at a wide range of leading institutional investors from more than 15 countries, with over $2.8 trillion of equity funds under management, overwhelmingly say that the financial crisis is still not over. This is according to a new global survey recently conducted by business advisory firm FTI Consulting.

The survey of more than 153 leading institutional investors revealed that: 64 per cent of respondents globally said that they did not believe that the financial crisis was over, with 31 per cent saying the crisis was over, and 5 per cent undecided.

UK, US and Australian investors were the most pessimistic with 73 per cent, 76 per cent and 80 per cent, respectively of investors believing the crisis had not ended.

Continental European and Asian (including the Middle East), investors were slightly more optimistic with 59 per cent and 62 per cent; respectively saying the crisis was not over.

According to Jack Dunn, FTI’s President & CEO, the majority of funds surveyed did not believe the financial sector has recovered since the pinnacle of collapse in September 2008. This sentiment is reflected across all regions, with US, UK and Australian investors the most pessimistic. In Continental Europe and Asia (including the Middle East) there is more optimism, but a significant majority still does not believe the sector is back on track.

“Anecdotal evidence gathered during the survey suggests that across the globe investors were still concerned that the amount of leverage in the system that caused the original problem

has not been reduced. The prevailing view was that there has been so much economic stimulus that markets can not help but go up. The concern was what would happen when government money runs out,” he said.

“These findings suggest a paradox, in that despite the negative outlook, global equity markets have rallied significantly in recent months. This indicates a willingness of investors, for now at least, to focus on factors beyond the fundamental issues that caused our current economic crisis.”

Dunn said the findings reflected on-going uncertainty in world markets and highlighted challenges that would be faced by world economic leaders at the upcoming G-20 summit in Pittsburgh.

“There is no doubt that the ongoing uncertainty is having follow-on effects throughout the global economy. Among US companies alone, approximately $163 billion of corporate speculative grade debt is due to mature in 2010, with approximately $266 billion set to mature in 2011, according to Standard & Poor’s research. These enormous financing requirements amidst still-fragile credit

Do you believe that the financial crisis is now over ?

Investors across the globe are still concerned that the amount of leverage in the system that caused the original problem has not been reduced

markets, and weak demand apart from government stimulus, put a premium on a company’s ability to effectively manage both public perceptions and the underlying business.“ “For many companies, this uncertainty has meant looking at alternative funding avenues, such as sovereign wealth funds, the equity markets, or more exotic capital raisings. For policy makers, it has meant reassessing the regulatory environment and executive incentives that have driven the market for many years.”

The survey was carried out by the investor relations practice of Financial Dynamics (FD), FTI’s strategic communications division. The survey was based on interviews with 153 of the largest institutional investors across the world’s principal financial markets that between them have over $2.8 trillion of equity funds under management. 21 per cent of investors surveyed were based in the UK, 20 per cent were based in the US, 21 per cent were based in Asia (including the Middle East), 34 per cent were based in Europe, and 4 per cent based in Australia.

BANKING AND BUSINESS REVIEW

October 2009 11

C OV ER STORY

New bank front-benchers Increase in number of skips worries banking sector

By Ambily Vijaykumar

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alf a million cheques issued in the first four months of this year in the UAE have reportedly bounced. That number has gone up considerably since then. Invariably, the reason that banks cite for the bounced cheques is insufficient funds in customers’ accounts. The number of court cases in connection with the

12 BANKING AND BUSINESS REVIEW

offence is also on the rise, as issuing a cheque that bounces is criminal in the UAE and invites prison terms.

The situation, much like the financial crisis, is unprecedented and has been the result of redundancies in the aftermath of companies continuing to downsize.

Defaults have gone up, but what is worrying the banking industry is the

October 2009

sudden spurt in the number of skips.

Not a pretty picture for the sector, where the lenders are tightening and even freezing the lending process.

HSBC Bank Middle East has reported a surge in its number of skips or absconding customers since the end of 2008. The bank says that the skips account for half of its bad debt and it doesn’t see the numbers reducing in

the near future.

Even local banks have reported that a large number of their customers are leaving the UAE without settling their credit card bills. In-house research by banks also say between 1,500 and 2,500 customers are leaving the UAE every month without paying up on credit cards. Fully aware of the fact that the country with its large expatriate population is prone to a situation where skips are bound to occur, banks have been bracing up for the situation.

And yet there is a flip side to the story. Despite the difficult recovery situation, banks are refusing to budge from their tough pre-payment conditions. For instance, a bank in question imposed a 5 per cent pre-payment penalty every time a bulk payment was made, while at the same time refusing to accept a cheque on the pretext the facility could be applicable only for a final settlement of the loan.

The instance stands in sharp contrast to the overall picture, and sticks out like a sore thumb in the banks’ approach towards genuine customers willing to repay their dues. The consumer banking head of a leading international bank in the UAE agreed “it is unwise to do that in today’s times.”

Skips are said to account for half of a leading bank’s bad debts as customers simply abscond, leaving behind large amounts of unpaid dues In any case, debt collection has assumed unprecedented importance.

Though it has been an integral part of the banking business, it is now being assigned to the fore-fronts of the banks’ operations. Banks have begun ‘redeploying’ their employees to this arm and are training them in the requisite skills to retrieve the millions that customers owe them.

While the term itself conjures images of strong-arm tactics, constant harassment over the phone and in several cases even personal intimidation, banks insist their approach is ‘measured’. Conversely, reports have also been doing the rounds that customers with dues of as little as Dh16 are being virtually stalked into coughing up the money. The incident is a reflection of the “failed collections strategy of the bank,” says a leading banker, considering that the cost of calling up the

‘defaulting’ customer would amount to more than the outstanding.

One such hassled customer had her telephone buzzing every hour with reminders of a credit card payment though she had closed her account at least two months before. “It shows the utter lack of coordination within the bank. How can I owe them money, when the card has been closed and all dues settled long ago? They call me when I am in the middle of important meetings, when I am home, while driving, just about anywhere. Banks are insensitive towards customers,” she alleges.

In-house handling of collections entails “assigning the best of our talents to do the job”, says Sanjoy Sen Consumer Banking Head of Citibank Middle East. The bank has close to 200 people designated to carry out the job.

Smart technology too has come in to assist banks while handling data on customers running into thousands.

Making individual calls to the customer remains the conventional way to approach debt collection, but the use of auto-dialers aids in the process by cutting down on the time needed to manually punch in the numbers. Managing data of delinquent customers on a customer account level through queue management system is also central to the functions of technology aiding the collections programme.

A more advanced use is a combination of technologies to even ascertain preferred calling times for customers based on previous customer contact behaviour. This way the banks get an opportunity to interact with their customers, which is the primary requirement for the collections team.

Banks say that a ‘customer-centric approach’ forms the core of their collections activity, whereby they strive to ascertain the reason behind a person’s

BANKING AND BUSINESS REVIEW

October 2009 13

inability to meet the commitment to the lender. After identifying the problem, the next step is to work out an appropriate solution that benefits both parties involved.

“Counseling experts” in banks undertake the task of chalking out a payment solution with defaulting customers who have the intention to pay but not the ability. In such cases, banks re-write a customer’s loan to suit the changed payment pattern and tenure. But this cannot go on forever.

So where do they draw the line?

Obviously no bank will re-write endlessly since all debt collection activity is guided by a set of rules. But banks do take into account a person’s intention to pay. So a customer who has the intention but not the ability will demonstrate that intention by paying something. Flexibility is exercised to the extent of increasing the loan repayment tenure and amount to accommodate financial difficulties arising out of a job loss, for instance.

However, in the event of a failed negotiation with customers, banks seek legal remedy particularly in cases of bounced cheques. A leading law firm in Dubai confirmed that there has been an increase in the number of bounced cheque cases that they handled over the past year.

Segregating customers based on their default patterns is also a method used by banks to ascertain whether a default would lead to skip. So when a person defaults for the first time, the bank establishes contact with the customer to deter a future default. As part of customer profiling from the very outset, much before a default, customer spending patterns are closely monitored.

Enabling to understand the skip propensity of customers are scientific tools like the ‘skip score card’ that banks employ to avoid future defaults. For example, if a customer who through his spending pattern has not demonstrated a willingness to purchase jewellery suddenly goes on a jewellery purchase binge, that gives enough fodder for banks to take ‘proactive measures’.

In-house handling of collections

14 BANKING AND BUSINESS REVIEW

Banks have begun ‘redeploying’ their employees to debt recovery and are training them in the requisite skills to retrieve the millions that customers owe them apart, banks also outsource their debt collection activities to recovery agencies that have over a period of time earned a bad reputation. “We do due diligence on the agencies and ensure that the quality of collections and customer interface of the agencies, who represent us, meet our stringent standards,” clarifies Sanjoy Sen. Similarly, Barclay’s bank comes to the defence of its chosen agencies saying they have these agencies both within the UAE and outside but, “each one goes through a careful selection process to ensure they meet our strict internal code of conduct and reflects our collection practices.”

Overall, debt collection practices have undergone a sea change in conjunction with the downward spiral in the UAE market. A ‘soft’ negotiation with customers is now the emphasis,

October 2009

banks point out. But much before the banks reach a stage where they have to track a defaulting customer, lenders continue to vouch for prudent lending norms and detailed customer profiling before issuing a loan. This includes verification of customers’ addresses both in the country of residence and origin and coordinating with the customers’ employers in cases where loan repayments are through salary transfer, among others. But the recession has thrown up an entirely new challenge for banks to counter: there are of course defaulting customers, but there are also absconding customers.

Legally, in cases where the debtor is in the country, the law requires the banks to produce proper documentation, including the amount collectable as well as the debtor’s address. A summon is then served on the debtor

and in the event of the bank getting a favourable verdict, it can enforce the judgment against the assets of the debtor. This means any account owned by the debtor can be frozen or the assets owned by him can be sold under court supervision and the proceeds can then go to the bank.

Coupled with the absence of credit bureaus in the market, the task of successful recovery from an absconding debtor becomes tougher for banks. The construction sector crash and the resultant job losses have already led to a continuous exodus of expatriates. This has been the key reason for the piling up of bad loans for various banks in the country.

Such cases also become difficult to convert into a successful recovery, proof of which is a leading local bank revealing that they are able to recover only up to a quarter of their unpaid debt because of fleeing customers.

Even success through legal recourse is something that isn’t guaranteed when it comes to tracing a debtor for recov-

ery outside country limits.

Impeding a favourable solution for banks is also the procedural hassle of serving summons to a debtor who has fled the country. A Dubai-based law firm we spoke to in this regard refused to put a figure on the success rate of

banks themselves admit, “once an account goes into write-off, recovery is a meagre 20-30 per cent.” Even with such low success rates for long-drawn cases, banks say they do not discontinue the collections process. They then switch to a ‘different approach’ until a solution is found.

It is this new approach that is the subject of scrutiny. While no banks will admit it openly, there are a number of examples of threat being used to retrieve money the world over. That also explains why international banks utilize their network across several countries to track customer who flee from one country to the other.

“Once we have confirmed that a person has actually left the country, the customer will go through the dedicated skip process. The first step is the Skip Tracing process where we identify the home country, once that is complete we allocate the case to a home country agent,” says Salman Irshad, Head of Retail Credit UAE at Barclay’s Bank.

The rising bad debts have helped the growth of a parallel industry in countries like the US and Europe: that of debt sale. This means that banks that have bad debts package them and sell to someone else who, depending on the success rate of recovery, makes a profit.

Since these are bad loans they are sold on a discount as not all money may be recoverable. Bankers here attribute this

Banks say a ‘customer-centric approach’ forms the core of their collections activity, whereby they strive to ascertain the reason behind a person’s inability to meet the commitment to the lender such cases that travel outside the UAE, but banks are citing very low figures, which tells the story.

Probability of a recovery is high during the initial few months of the default, with the resolution rates for early collection cases being up to 85 per cent. But as

phenomenon to the ‘maturity’ of these markets where there is more transparency regarding the quality of debt on sale. Lack of a credit bureau deters the introduction of debt sale in the UAE market as that will require reliable data regarding the nature of the debts.

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October 2009 15

Skips are a fact of life in UAE Large expat population increases risk factor, says Barclays

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elinquency rates at Barclays Bank UAE have increased over the past nine months and the bank is expecting it to “increase slightly” in the near future. In conjunction, the number of skips that have also contributed to these rising rates has also shown an incremental trend, with the second quarter being higher than the first.

Barclays says that banks in the UAE have to be prepared to deal with the issue of skips since it has always been a risk factor in the country where a large portion of the population consists of expatriate workers. Economic uncertainty, coupled with redundancies, has contributed vastly to the skips this time, since those who have lost jobs are finding it challenging to find a new one. And with work visas needed to stay in the country, those who do not find new jobs are forced to leave.

Despite the climbing numbers, Barclays says that its approach to retrieving money from defaulting customers is very measured. “The objective is to understand the inherent issue behind the customers’ inability to meet their commitments and try to get them financially stable again as quickly as possible,” says Salman Irshad, Head of Retail Credit at Barclays Bank UAE. Collections and recovery have been one of the bank’s key focus areas this year and the lender does not see that focus shifting any soon in the near term; a clear indication of what the banking sector is bracing for. Stepping up the concerted efforts to contain the piling bad loans is also increased bench strength in the debt collection department. “People have been moved internally and also specialists from other areas of the bank have been reassigned to the collections job to ensure that the best people and the best

Collections and recovery have been one of key focus areas of Barclays this year and the bank does not see that focus shifting any soon in the near term

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October 2009

minds are working on it,” says Salman.

“It is a customer-centric collections approach,” he elaborates. Entailing a focus on early collections activity, the bank lays emphasis on reviewing a customer’s specific situation, based on his ability and willingness to pay. It is

based on the initial review that a relevant solution that benefits both the customer and the bank is chalked out. In instances where the law of the land is in question, like bounced cheques, banks resort to legal recourse since failure to honour a cheque is a criminal offence in

the UAE. Prior to the situation reaching a point where the bank has to resort to the recovery process, the lending norms have been reviewed to ensure that customers are not being stretched with regard to their financial commitments. Part of the process entails providing the right product solution for the customer. Reviewing a customer’s situation based on their ability and willingness to pay is a priority with a dedicated team of counseling specialist at hand, who works with customers to understand their problem and work out an appropriate solution.

“At Barclays our customer asset portfolios have been rationalised during the credit crisis, reflecting our policy on responsible lending and a renewed focus on the process of new account approvals,” elaborates Salman. Technology and integrated systems also play a vital role in managing the collections and

recovery process. Increasing number of defaults and skips is managed by the core collections software that provides intelligent queue management system for all delinquent customers and also an automated tracking function that logs all collection activities at the cus-

tomer account level.

On the telephony front, auto dialers aid in increasing productivity with automated speed dialing to reduce the time between two calls. There is also technology available to identify preferred calling times for customers that is deduced from previous customer contact behaviour. A combination of these technologies aids the bank in succeeding to establish a direct contact with their customer that is central to the collections activity.

The repercussions of the financial crisis have proven that even due diligence is no guarantee against bad loans.

Hence, what is being affected now is the collections strategy. There is no undermining the fact that there is an urgency to retrieve money but there is also strict adherence to the ‘code of conduct’ followed for the process.

The code is also applicable to the external agencies employed by Barclays to carry out the process. The number of external agencies employed by the bank both within the UAE and outside has increased. This is to ensure that “the bank can reach its customers wherever they may be,” says Salman.

Handing over the case to an external agency has generally been wrought with controversies but Barclays maintains that “each one goes through a careful selection process to ensure they meet our strict internal code of conduct and reflect our collection practices.”

Confirmation of a person having left the country then prompts the bank into resorting to the skip tracing proc-

ess where the customers’ home country to which they have fled is identified and the case is then allocated to a recovery agent there. The success of the collections process is hugely dependent on the number of successful recoveries. At an early stage into the process, possibilities of getting the money back is as high as 85 per cent, but as a case stretches further, the chances reduce to as low as 20 to 25 per cent. That happens when a customer has missed several payments in a row.

The time frame for successfully implementing the process is of essence but that has not deterred Barclays from pursuing the process “until a solution is found”. One of the future solutions for the banking sector to ward off bad loans could also be debt sale, a phenomenon that is common in the US and Europe, says Barclays.

“The key factor behind debt sale is the overall level of market maturity so while debt sale is common in the US and Europe, the same cannot be said of the UAE. One of the key initiatives that will help the market to develop will be the introduction of the credit bureau to ensure that there is more transparency about the quality of debt that is on for sale. Until that happens, large players in the debt sale market would be unwilling to take the potential risk associated with the portfolio especially if they have the opportunity to purchase debt in more mature markets where this kind of data is readily available,” says Salman.

When that happens is a matter of debate and so is the time when the current slowdown in the market is expected to stabilize. Barclays believes that a clear picture of the market would emerge by the end of the year though some indicators have suggested to a bottoming of the downturn. The bank has seen some stability in credit performance of some customer segment, including mortgages and credit cards where banks are becoming particularly active.

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October 2009 17

No alarm bells With a philosophy to underwrite the customer and not the product, Citibank says it has managed to contain default levels

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he rate of skips is a ‘cause of concern’ but not enough to set off alarm bells, says Citibank in the UAE. The international bank says that with its cautious lending strategy, it has been able to keep its losses and skips within predictable limits; this despite the delinquency rates being higher than last year. The bank says it has succeeded to contain the default rate within single digits.

With expertise in consumer banking in over 75 markets across the globe, the recession is, according to Citibank, “not something new to us.”

The expertise gained from previous experiences has apparently come to the bank’s aid. Good underwriting becomes indispensable in a non-credit bureau environment like the UAE. With a philosophy to underwrite the customer and not the product, the bank says it has been able to ascertain that the person who gets the loan has the means to repay it.

“Many institutions would offer credit cards, home loans, car loans etc without doing due diligence of the customer’s ability to handle the loan.

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From our perspective, a customer is one. He has only one income so we underwrite a customer and based on his repayment capability offer different products,” explains Sanjoy Sen, Citibank’s Consumer Banking Head Middle East Region.

The present scenario has to a large extent blunted the effectiveness of these measures since bad debts have been accentuated by the rapid increase in job losses. There are also reports of banks keeping aside large sums in provision as a buffer against future bad loans. Collections have hence assumed far greater prominence than they did before. “For us collection is a frontline strategy not an afterthought.

So we don’t first sell a product, give out loans and then think about collecting it,” elaborates Sanjoy.

With debt collection being a multipronged process, collections capacity planning forms the initial phase of the process. Earmarking a set number of people with a specific quality and imparting training to them in service skills is central to assessing the bank’s capacity to carry out the process.

Ability to negotiate with custom-

October 2009

ers goes a long way in determining whether a successful retrieval is possible. This goes on alongside investment in technology like auto dialers that aids the process. Scientific tools like the skip score card helps in understanding the propensity of those customers who are prone to default and

“For us collection is a frontline strategy not an afterthought; so we don’t first sell a product, give out loans and then think about collecting it” skips. The tools enable the bank in taking proactive steps on these customers. For instance, a customer who has never bought jewellery suddenly goes on a jewellery buying binge, which is a warning to the bank that something is amiss.

When the issue is that of ability, the collections strategy is centered on educating and working with their customers to understand the requirements and helping them come out of the credit cycle It is to differentiate the different kind of customers and their defaulting patterns that the bank has developed its own categorization technique called ‘bucketing’. The sifting happens based on the nature of the defaults. “A customer might have skipped two installments, someone else might have a temporary problem in paying up and yet another could have left the country. So each of these cases requires a dedicated approach to be resolved,” says Sanjoy.

Once the sifting is done, next is the strategy to differentiate between the customer’s ability and intention to pay.

When the issue is that of ability, the collections strategy is centered on educating and working with the customer to understand their requirements and helping them come out of the credit cycle. Guiding the customer on proper financial planning and using credit wisely is the key to the assistance that Citibank offers.

‘Soft’ negotiation skills might also not lead to the desired results. So when does the bank push things further? “If a customer’s repayment is delayed by 10 days, we don’t send a person to his house to collect that money. There are various stages to the approach. At an earlier stage, we write letters to the customer, at the next we telephone a

customer and later we would visit and then finally when all of the above fail to bear fruit, we employ legal measures. Previously we would telephone a customer on a 30 day default, but now we begin that process a little ahead by

Sanjoy Sen, Consumer Banking Head, Citibank, Middle East Region

sending reminders,” says Sanjoy Sen. Even the extent of the default in terms of amount outstanding is a deciding factor on the approach to the collections activity, says Citibank. The bank, however, denies using strong arm tactics to recover money saying that is not part of their approach to the issue.

Despite the measures of careful underwriting and later negotiations, the present situation has people fleeing the country, leaving behind massive debts.

Citibank says that the possibility of recovering the money from someone who is not within the geographical limits of the country reduces considerably though the bank does seek assistance from its branches in other markets and use their expertise and collections framework “selectively in some markets” to get back the money.

Exceptions don’t make the rule, but cases where customers who are willing to pay back and have practical difficulties in doing so are dealt with extreme care, the bank points out. “We handhold the customer and walk him through the credit cycle. We have different collections mechanism in which we re-write and re-negotiate and change the terms of the contract so that we can reduce the payments and increase the tenure of payment,” Sanjoy says.

Re-writing is not a permanent solution though. There are situations when the bank has to decide whether the customer’s intention to repay is genuine or not. “A person who has the intention to pay but does not have the ability will demonstrate by paying something so that partial repayment is a demonstration of his intention. The re-write tool comes into play when a customer has shown an intention to pay back and comes and says that ‘I have lost my job and am in the process of getting a new one’, but with a lower salary he will be able to pay a reduced installment.

Our collections team does not work on something ad hoc,” says Sanjoy.

With a team strength of close to 200 people in its collections department, Citibank says that on a typical day a person in the department makes about 70-80 calls; a testimony to the rising number of defaulting customers. The bank says that even though as an institution it can advice customers to exercise financial prudence, the bank cannot stop them from applying for credit cards from other banks. The lack of credit bureaus has put the onus back on the banks to ensure that they employ all necessary filters while dealing with a prospective customer.

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October 2009 19

EC ONOM Y

Tight credit hampering recovery StanChart economists see banks competing for deposits to bridge funding gap

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espite the rise in oil prices, credit conditions continue to be tight in the UAE and this is standing in the way of economic recovery.

Outstanding loans are still higher than deposits by Dh37 billion as of July and this shows banks are faced with a funding gap, according to Standard Chartered economists. The latest figures from the UAE central bank show that total loans, advances, and overdrafts contracted by 0.2 per cent month on month in July, with outstanding loans remaining higher than deposits

by Dh37 billion as of July 2009.

The funding gap is also leading to higher deposit rates as banks compete for deposits to bridge the gap, bank’s Dubai-based economists Marios Maratheftis and Mary Nicola say in a report. Marios is Regional Head of Research, MEPNA, and Mary Nicola, the bank’s MENA Economist.

Saudi Arabia is also placed in a similar situation, with the prevailing credit conditions hampering economic recovery, they said.

With oil prices rebounding, the glo-

20 BANKING AND BUSINESS REVIEW

bal economic outlook is improving and markets are now beginning to focus on the nature of the recovery. UAE and Saudi Arabia benefit significantly from higher prices, both countries having enjoyed estimated budget surpluses of 22 per cent and 33 pre cent of GDP respectively in 2008.

Higher revenues in 2009 as oil prices continue to recover will help both governments continue comfortably

credit growth remains flat, although the reasons behind the two countries’ credit crunches are quite different, the economists point out.

They feel that the growing oil revenue should help to replenish deposits and gradually improve credit condi-

Despite the benefits of higher oil prices and their positive impact on government spending and revenues, liquidity in the UAE is tight, and credit growth remains flat with their expansionary budgets – especially considering that the hydrocarbon sector contributes 81 per cent and 90 per cent, respectively, to government revenues in the UAE and Saudi Arabia. Despite the benefits of higher oil prices and their positive impact on government spending and revenues, liquidity in both countries is tight, and

October 2009

tions.

Credit growth in Saudi Arabia in July was only 0.1 per cent month on month and they feel that the credit crunch in Saudi Arabia is primarily a confidence problem.

“Deposits are higher than loans.

Yet while Saudi banks have the liquidity and the ability to resume lending,

they are instead opting to increase their deposits with the Saudi Arabian Monetary Agency (SAMA). July data showed a 9 per cent increase in deposits held with SAMA. Here, more efforts are needed to boost business confidence,� they said.

Saudi Arabia and the UAE have the lowest costs of hydrocarbon production among the oil-producing countries (currently estimated at $20 per barrel for Saudi Arabia and $22 for the UAE).

Government revenues have fluctuated tremendously over the course of the year, as is typical for countries that rely heavily on commodities. In July 2008, when the Saudi Arabia Light Spot price (which is used in the OPEC reference basket) was at $132 per barrel, Saudi revenues reached close to $1 billion

With oil prices rebounding, the global economic outlook is improving and markets are now beginning to focus on the nature of the recovery per day. In the UAE, 2008 production reached 2.567 million barrels per day and the Abu Dhabi Murban Spot Price reached $140 per barrel; as a result, revenues peaked at $304 million per day.

It is interesting to compare these numbers to February 2009, when both production and prices fell to the lowest levels seen in 2008-09. Saudi Arabia produced an average of 7.86 million barrels per day and prices averaged $38.5 per barrel; revenues were only $145 million per day. For the UAE, production fell to 2.223mbpd and prices declined to $44.68 per barrel, causing revenues to fall to $50 million per day.

Assuming constant production at current levels, the bank estimates that the UAE and Saudi Arabia gain roughly $3 million and $ 8 million in revenues per day, respectively, for every $1 increase in oil prices.

The report notes that when it comes to real versus nominal GDP growth, the level of oil production has a bigger direct effect on real output than on nominal output. The impact of prices is indirect, felt through the wealth effect and potentially higher government spending and investment. The report refers to a strong correlation between

BANKING AND BUSINESS REVIEW

October 2009 21

year-on-year changes in oil production and real GDP growth. The relationship is stronger in Saudi Arabia, given that the hydrocarbon sector makes up almost 50 per cent of GDP, versus a 35 per cent direct contribution to UAE GDP. Oil production is highly correlated with oil prices, with OPEC reducing production when oil prices drop in order to stabilise them, and vice versa. The rebound in oil prices could have implications for production. The report notes that further production cuts are unlikely, especially as WTI prices approach $75, the level cited by Saudi Arabian Oil Minister Ali Al-Naimi as the fair value of oil. Potential oil production increases in 2010 could be another catalyst for a strong rebound in the GCC next year, the analysts say.

the business outlook. Order lead times have shortened, as overseas buyers are only willing to commit to orders for the very near term.

This implies that manufacturers and exporters still need to manage their cash flow and working capital carefully, which is deterring fresh capital investment, the bank points out.

For companies with exposure to commodities, the volatility in commodity prices is further limiting investment confidence. Investment is likely to remain weak until business confidence

choose to tighten first, but they are only likely to take action once they see firm signs of an economic recovery, including a sustained improvement in business confidence, the report says.

At the same time, current levels of economic growth across Asia are still below trend. A full recovery to trend growth or above, and a subsequent removal of the output gap, will probably have to wait until 2010 or later. This implies that demand-pull inflation is unlikely to surface for some time, the report asserts.

sees a sustained recovery. To support the still-nascent recovery, governments need to reinforce public investment and boost business confidence, the bank cautions.

Central banks in the region have al-

“Of course, many have argued that Asian central banks should look to limit the risk of asset bubbles via monetary tightening, but this runs the risk of choking the recovery in its infancy, in our view. Hence, alternative measures

Asian recovery

The Standard Chartered report notes that most Asian economies saw acceleration in growth or a narrowing economic contraction during the second quarter of this year. The report asserts that the numbers confirm the bank’s long-held view that large, domestically driven economies are set to outperform small, export-oriented economies. China and Indonesia, where output never contracted in year or year terms, have clearly maintained stronger growth momentum than Singapore, Hong Kong, and Taiwan. Vietnam, despite its relatively high exports-to-GDP ratio, also sustained positive GDP growth due to relatively stable domestic demand.

Taiwan and Thailand, where export exposure is high and domestic demand is weak, underperformed in both year or year and quarter to quarter growth terms.

Among the key GDP contributors in the second quarter, gross fixed capital formation, or fixed asset investment, was a drag on growth across Asian economies. Excluding public investment, the negative contribution from investment would have been more severe. This implies that a rebound in business confidence is critical in order for the recovery to be sustainable.

While the global economic environment seems to be on the mend, the corporate sector is still very cautious about

22 BANKING AND BUSINESS REVIEW

The report asserts that the numbers confirm the bank’s long-held view that large, domestically driven economies are set to outperform small, export-oriented economies ready cut policy rates aggressively and supplied ample liquidity to the business sector. These loose monetary conditions are likely to persist until there is a sustained turnaround in business confidence and investment. China, Indonesia, India, and South Korea may

October 2009

to ring-fence the impact of financial market volatility on the real economy should be considered. In our view, hiking policy rates too soon would have a negative impact on both the general economy and the financial markets,” the report said.

SNAP SHOT

For a ‘Dunia’ of difference UAE’s newest financial services company promises differentiated offerings financial services sector. As the executive director and founder CEO of Dunia, Rajeev is required to leverage all his experience, skills and ideas to create a brand out of the fledgling local player that would conform to the concepts that he is used to working with. Results so far indicate good progress.

Dunia is the offshoot of a strategic partnership between Abu Dhabi’s

R

ajeev Kakar gets very passionate when he talks about customer satisfaction. On the previous occasion that we met him, he was Regional Head & CEO for Citibank’s Global Consumer Bank, managing the Turkey, Middle East and Africa region, a role that accorded him plenty of scope to try out his ideas. Of course, he then had the firepower of a global brand like the Citibank propelling his plans.

Today, he is spearheading a similar move at Dunia Finance, the latest entrant to the UAE’s no-holds- barred

24 BANKING AND BUSINESS REVIEW

Rajeev Kakar, CEO, Dunia Finance

October 2009

Dunia is the offshoot of a strategic partnership between Mubadala and Temasek Holdings of Singapore, two of world’s largest international governmentowned investment companies, along with leading local business groups Mubadala Investment Company, and Temasek Holdings of Singapore, two of world’s largest international government-owned investment companies, along with leading local business groups Al Waha Capital (formerly Oasis International Leasing Company), and A A Al Moosa Enterprises. Temasek’s presence in the partnership is through Fuller-

ton Financial Holdings, a 100-per cent owned subsidy.

Dubai-based Rajeev Kakar is also the regional head of Fullerton Financial Holding for Central Europe, Middle East and Africa region, in addition to his role as the executive vice-president and senior Management Committee member, heading consumer banking for all its bank and financial services investments and holdings across the globe.

Rajeev has spent more than two decades in the banking industry, starting his career with Citibank in India in 1987.

His association with this region began in 2000, when he was designated as the Country Head for Citibank in Egypt, where he launched the Consumer Bank, which grew to become the leading financial brand in the Egyptian market. Two years later he became Citibank’s Cluster Country Head & CEO for Turkey and Egypt, following which he was elevated as Regional Head & CEO for Citibank, managing the rapidly growing and complex markets of Turkey, Middle East, Pakistan and Africa. He has also served as a director on the CEMEA Board of Visa International.

According to Rajeev, what distinguishes Dunia from the rest of the financial sector players is its customer-

The company offers a wide range of products and services-- from loans, to credit cards, deposits for non-individual customers, and working capital facilities for small businesses. Dunia’s financial services company licence does not allow taking of deposits from individual retail customers.

“Dunia goes through excruciating detail to offer holistic solutions for different customer sub-segments, based on the desired customer unique value proposition, which is designed on the key elements of product, service, convenience, experience and price,” he explains.

According to him, once a customer takes a product from the company, it is the beginning of a relationship that may span a number of other products. There are no multiple forms that the customer

Customers apply for products through a single application form, and thereafter do not need to resubmit documentation for incremental products centric approach as opposed to the product-centric offerings by its peers.

He says the company has a segmented approach that first seeks to understand the needs of the customer and then offer the relevant financial product.

This has been made possible through the acquisition of state of the art systems that work on a unique technology platform, enabling delivery of a differentiated level of customer service to create the unique Dunia brand, says Rajeev.

is required to fill; nor are there multiple statements.

Investments into state of the art technologies and partnerships with service providers who excel in their individual areas of expertise have enabled the company to implement an integrated approach towards differentiated, and yet relevant offerings to meet the individual needs of the customer, he points out.

For instance, customers apply for products through a single application

form, and thereafter do not need to resubmit documentation for incremental products. Turnaround time is also minimized due to the paperless operational process where documents are centrally scanned and approval happens in a centralized location without the needs for documents to be physically transported.

“Dunia reflects a quality organisation, an organization and a business plan that strives to bring innovation and care to banking, enabled through the best in technology and process, and supported by a very talented and good management team,” says Rajeev.

Systems that allow 360 degree view of customer relations across all channels and a dynamic rule engine that allows instant credit decisioning allow the company to deliver holistic products, convenience, experience to customers in a ‘sustainable and predictable’ manner, he says.

He points out that the current financial crisis has brought bankers back to basics and validates the model that the company is following. While being innovative and flexible in its approach to customers and products, the company nevertheless strictly follows prudential norms and does business as a responsible lender.

For instance, you won’t find commission agents selling Dunia products as the company does not engage any third-party marketing agency to push its products, which is generally the norm in the marketplace, Rajeev asserts.

According to him, the company considers human resources as its biggest asset. His team includes highly diverse and talented management professionals drawn from leading financial institutions around the world who, like him, share the goal of delivering differentiated levels of customer satisfaction.

The quality of talent is the key to the success of any company, he stresses.

There are already over 500 professionals working for Dunia, with plans to hire more in the months to come, as the company readies itself for the opening of 19 new branches across the country.

- K Raveendran

BANKING AND BUSINESS REVIEW

October 2009 25

RE AL ESTATE

Relocations help in rents holding Movements to Dubai from Abu Dhabi and Sharjah offset effect of population decline 26 BANKING AND BUSINESS REVIEW

October 2009

A

lthough anecdotal evidence suggests that a significant number of expatriates have left the UAE in the first half of 2009, some of this decline has been mitigated by a stream of relocations from Sharjah and Abu Dhabi, resulting in a smaller net population effect than originally feared, a latest report on the Dubai property market has concluded.

According to Landmark Advisory, a division of Landmark Properties, this has also been bolstered by individuals opting out of shared accommodation, choosing instead to lease their own units on account of lower rents. Analysts expect that the Dubai Municipality’s intention to resume enforcement of the one-family, one-villa law to also support rent levels.

“This will increase the aggregate number of households, while decreasing average household size. The net effect will be additional demand for apartments and smaller townhouses, and villas. Due to the shrinking household size, however, larger villas may experience rent declines, due to this policy,” the report said.

According to the report, former Abu Dhabi residents that moved to Dubai, but commute to work in the capital, are primarily motivated by location when choosing a new home.

High-income commuters tend to prefer Dubai Marina/Jumeirah Beach Residences, Palm Jumeirah, Emirates Living villas, and Green Community villas. Middle income commuters from Abu Dhabi tend to relocate to Jumeirah Lake Towers and Discovery Gardens.

Relocation demand from Sharjah is primarily price-driven and centers on more affordable areas like Mirdiff, International City, and Al Qusais.

Landmark Advisory reports that there is an unexpected, albeit marginal, upsurge in rents across Dubai. At the same time, leasing inventories and listing volumes have fallen noticeably.

Landlords are de-listing or forgoing listing their properties, either due to

dissatisfaction with current rent levels, or because they are on vacation during the summer. Either way, the result is a marginal average increase in rents at a time when fundamentals should be dictating the opposite trend.

Assuming that landlords are exiting the market due to lower rents, this behavior will prevent Dubai’s leasing market from reaching a rent floor, the report points out. In an oversupplied

market. Real rents will be determined by what Dubai residents are willing to pay.

According to the Dubai Property Price Index (DPPI), during Q209, average sale prices for villas declined 24 per cent, while apartment prices fell 17 per cent. However, demand was considerably stronger for villas, which accounted for 73 per cent of all residential sales in Q209. Sale volumes

Middle income commuters from Abu Dhabi tend to relocate to Jumeirah Lake Towers and Discovery Gardens while relocation demand from Sharjah is primarily price-driven and centers on more affordable areas like Mirdiff, International City, and Al Qusais market like Dubai, rent floors are consumer driven. The momentary respite in the rent correction process, caused by a supply distortion, is only temporary and will reverse as soon as those properties come back onto the

in Jumeirah Village were particularly strong, with an average transactional price of Dh577 per square foot, which is considered excellent value.

While bid-ask spreads ranged up to18 per cent, nearly three quarters of

BANKING AND BUSINESS REVIEW

October 2009 27

all sales verified by Landmark Advisory had a 0 per cent bid-ask spread in Q209, with an aggregate average spread of 2 per cent. These spreads, however, cannot necessarily be extrapolated to the wider market listings, because of different pricing strategies, the report pointed out.

Year-on-year, villa and apartment prices are down 37 per cent and 25 per cent, respectively. Since peaking in Q408, however, villa and apartment prices have declined by 44 per cent and 36 per cent, respectively.

During Q209, average apartment rents in Dubai declined 23 per cent to Dh129,900, while average villa rents fell 19 per cent to Dh220,350. Although apartment rents declined more than villa rents in Q209, the opposite trend prevailed in the last quarter. Yearon-year, rents for villa and apartment rents have declined by 19 per cent and 12 per cent, respectively.

Since peaking in Q308, villa rents, according to Landmark, have fallen 31 per cent, while apartment rents are down 29 per cent since their peak in Q408. Relocations from Abu Dhabi, Sharjah, the Northern Emirates, and within Dubai are the primary factors driving leasing demand.

Overall demand for villas increased, as illustrated by a 25 per cent growth in leasing transactions. Two - and 5-bedroom villas experienced the heaviest rent declines, at 28 per cent and 27 per cent, respectively, with 3- and 4-bedroom villas, seeing rents fall by 18 per cent and 11 per cent, respectively.

According to the report, quantitative data and qualitative commentary indicate that demand was strongest for 3- and 4-bedroom villas, an observation supported by higher volumes and relative resilience of rents for those unit categories. The upgrading trend identified in Q109 continues, with 3and 4-bedroom villas faring best in terms of demand. Location preferences remained unchanged from Q109, with the following areas earning highest leasing volumes: Emirates Living (40%), Mirdiff (20%) and Jumeirah/ Umm Sequim (20%) Overall demand for short-term

28 BANKING AND BUSINESS REVIEW

Overall demand for villas increased, as illustrated by a 25 per cent growth in leasing transactions, although 2- and 5-bedroom villas experienced the heaviest rent declines, at 28 per cent and 27 per cent, respectively villa rentals remained stable in Q209, compared to Q109. However, where demand for short-term villa rentals was relatively well distributed accounting for 83 per cent of transactions.

Apartments

Overall demand for apartment rentals increased in Q209, as demonstrated by a 20 per cent growth in leasing volumes. Transaction patterns show strong demand for 1- and 2-bedroom apartments, and weaker demand for 3and 4-bedroom apartments. Average rents for 2-bedroom apartments declined 44% in Q209, more than any other unit-type. This was caused by strong demand for 2-bedroom apartments in more affordable developments, like International City.

The report cites transactional data to say that 3-bedroom apartment rents fell the least, with a quarterly decline of 24 per cent, due mainly to demand for larger units concentrated in higher quality buildings. Approximately 60 per cent of all leasing transactions for 3-bedroom apartments were in

October 2009

the Dubai Marina/Jumeirah Beach Residences (JBR) area, while 80 per cent of the total were in premium locations, like Dubai Marina/JBR, Downtown Burj Dubai and Palm Jumeirah.

Overall, the most popular areas for apartment rentals in Q209 were Dubai Marina (26%), Jumeirah Lake Towers (19%), and International City (19%). A major difference over last quarter is the spike in leases for International City apartments. During Q109, International City accounted for only 2 per cent of all apartment rentals, but in Q2, it registered as many transactions as Jumeirah Lake Towers (JLT). Demand in International City was primarily driven by upgrades to larger apartments by tenants within the development itself; approximately 75 per cent of International City leases were for 2 bedroom apartments.

The decline in Dubai Marina’s share of total apartment leases is not symptomatic of falling demand; the absolute number of leases in Dubai Marina remained relatively stable. Instead, it indicates a relative increase in demand for other areas.

Demand for short term apartment rentals remained stable in Q209 compared to last quarter. The top areas for short term apartment rentals are Dubai Marina (41%) and Emirates Living (36%). Landmark Advisory expects a total of 22,700 residential units to be delivered by end-2009.

This projection is slightly lower than estimates made last quarter, as developers continue to re-phase projects and delay construction. While the current estimate for new unit deliveries in 2010 is 40,400 units, analysts expect this to fall to 25,000-30,000 units over the next 12 months.

The report points out that for endusers in need of financing, interest rates and LTV ratios are the key factors shaping residential sales demand.

Mortgage rates are between 7.75 per cent and 10.5 per cent, but currently

The market is entering a period of massive over-supply amid a pattern of demand destruction, which will likely last for quite some time. During Q209, office sale prices declined 12 per cent, but since peaking in Q308, Dubai office sale prices fell 42 per cent. Office rents fell on average 10-15 per cent in Q209 average around 8.5-9 per cent. In contrast, construction financing rates, which shape supply side decisions, are currently 7-8 per cent. As such, a systematic imbalance persists, where residential demand is restricted by high borrowing costs and credit scarcity,

while building is incentivized by lower capital costs on construction loans.

According to Landmark, disjointed lending practices continue widening the supply-demand gap. In some areas, like Jumeirah and Satwa, supply is decreasing, as older buildings are demolished. While the overall effect is currently negligible, a coordinated urban regeneration plan would control aggregate supply and therefore help stabilize the market.

Such a strategy would be especially beneficial in light of improved building standards, it says.

According to the report, despite immigration from other emirates, Dubai’s total population may still decline.

Analysts expect more outof-work expatriates to leave the UAE by summer’s end, but many are currently staying in a final attempt to find new employment. As such, the reported future school enrollment figures can be misleading, they say. Many parents may have chosen to keep their children officially enrolled, just in case they are able to find a new position.

In reality, using school enrollment as an indicator will not provide meaningful results until September/October 2009, they point out.

They say that looking to 2010, actual rent levels will depend on multiple factors, including the real volume of unit deliveries and net demand growth. While relocation trends are currently propping up the leasing market, its long-run performance will be defined by Dubai’s ability to achieve

net job creation. This will depend on macroeconomic performance and government policies, both of which are impossible to predict.

Signs continue to indicate probable sale price stabilization in Q409, which, could be the beginning of a price floor.

However, this is highly dependent on macroeconomic, financial, and real estate industry policies and trends.

Based on historical trends, sale volumes

are likely to dip during August and September, but then pick up again in the fourth quarter.

Landmark feels that the strong demand for villas is likely to continue from investors and end-users. Based on current supply projections, villas will constitute less than 20 per cent of total residential unit deliveries in 2009, and even less in 2010-2011. Given these

BANKING AND BUSINESS REVIEW

October 2009 29

supply and demand characteristics, villas are likely to reach a price floor first.

Apartments, on the other hand, will be subject to additional sale price volatility due to the large volume of new supply likely over the next 2 years.

However, price floors for apartments are expected to start forming in the short term within specific areas.

Such areas will be defined by stable or limited supply, plus strong and continuous demand fundamentals.

The proverbial ‘location factor’ and master development quality will be key, they say. Of course, other factors like amenities/facilities, views, parking and maintenance fees are also important for residential demand.

According to Landmark, due to the continuing influx of new rental units, average villa and apartment rents will continue to decline into Q409.

The intensity and longevity of these declines will depend largely on owner decisions, like when to list the property and how much rent to charge.

However, as leasing rates decline, additional demand from relocation is likely to support rent levels, keeping them from falling too sharply. While it is difficult to call a bottom, there is some evidence to suggest that rents in specific areas may stabilize in Q409.

Ultimately this will depend on the supply-demand dynamics prevailing in each location, the report says.

Referring to Dubai’s commercial office market, the report says the market is entering a period of massive over-supply amid a pattern of demand destruction, which will likely last for quite some time. During Q209, office sale prices declined 12 per cent, but since peaking in Q308, Dubai office sale prices fell 42 per cent. Office rents fell on average 10-15 per cent in Q209. Corporate restructuring, layoffs, frozen recruitment, and delayed expansion have changed short-term office demand characteristics, making them difficult to model accurately into the medium- to long-term The vast majority of companies have frozen all recruitment and expansion plans for the short- to medium-term. Redundancies, corporate restructuring, and cost-

30 BANKING AND BUSINESS REVIEW

cutting measures have caused average office space consumption to decrease significantly.

The report says that of the little demand that currently exists, most focuses on smaller units. Recently delivered office buildings in Dubai are finding it increasingly difficult to rent out entire floors or larger units. Smaller offices are absorbing faster. In general, vacancy rates in newer buildings will remain higher for longer periods, as absorption rates continue to fall.

While inquiries into new commercial space do continue, most companies are waiting until early 2010 before making

any decisions on acquiring new office space. Furthermore, pre-fitted out units are increasingly attractive to potential new tenants, due to lower setup costs.

Fitted out units in new buildings retain a considerable premium over shell & core.

In the short-term, corporate restructuring, recruitment plans, and finances will remain an important factor affecting office space consumption.

Several prominent international surveys show that most chief operating executives of large multi-nationals intend to continue reducing headcounts throughout 2009. At the same time, a

Transactional data indicates that 3-bedroom apartment rents fell the least, with a quarterly decline of 24 per cent, due mainly to demand for larger units concentrated in higher quality buildings

October 2009

number of regional, industry-specific surveys indicate likely resumption of recruitment among banking, investment, and oil & gas professionals, specifically in the UAE. Shell & core units are becoming less popular, as tenants look for ways to cut capital expenses. However, this trend is not binary; certain tenant profiles continue to prefer shell & core delivery, although this segment is now smaller than ever before. To maximize absorption, landlords will have to be increasingly creative regarding leasing terms and incentives, including free parking, contribution to tenant moving costs, and even no-payment periods.

Dubai’s commercial property glut will continue to worsen over the next three years, the report says According to Landmark calculations, during 2009, 10.5 million square feet (977,000 square meters) of new office space will be delivered to a market already reeling from economic shocks.

While supply figures for 2010 and 2011 may be revised downward in the future, actual delivery will exacerbate existing oversupply and push office prices and rents down. To absorb the supply delivered only in 2009, Dubai’s economy must generate 85,000-90,000 new office jobs. Based on the officeconsuming share of total employment and the rate of expatriate economic activity, this rate of office sector job creation will require a full 20-30 per cent population increase. Even under normal circumstances, this growth rate would be virtually impossible, it says.

Poor planning has created a supply glut that will take many years to resolve.

The economic downturn is only part of the problem. When Dubai had a shortage of office space, and saw everescalating rents and prices, developers churned out commercial development plans without considering aggregate trends.

Dubai office prices are likely to decline further, as additional supply enters the market. Given the prevailing market uncertainty and continuing credit scarcity, demand is currently minimal and likely to remain low.

The main source of sales demand will come from companies with long-term

commitments to the region.

The commercial component of the current real estate cycle is likely to be more protracted than for the residential segment. Changes in lending policies will be a significant factor defining the length of the cycle. However, given the uncertainty in the local office market, banks are unlikely to improve lending policies significantly in the short term. Low LTVs and the high cost of borrowing are likely to continue restricting demand.

For those companies with a long-term perspective and available

Grade A offices in prime locations are available for Dh2,368 – 2,690 per square meter in some cases already fitted-out with luxurious finishings.

Referring to the Abu Dhabi market, the report says that while there are few transactions taking place in Abu Dhabi, the rate of real price declines appears to be slowing, for the time being. Average aggregate listing prices regained some stability in Q209, after declining sharply between Q308 and Q109. The slowing rate of price correction is mainly a consequence of significant adjustments having already played out during Q408

financing, the next 12-18 months will provide excellent opportunities to acquire inexpensive office space. Of course, this will depend on the financial situation of individual companies.

Leasing rates are likely to keep falling. As vacancy rates increase and absorption rates decline, landlords will be forced to implement competitive pricing strategies. Owners should be offering creative incentives, like compensation for moving costs. The short- to medium-term will be an excellent time for companies to consider upgrading office space. Currently,

and Q109, as well as growing resistance by sellers to lowering their prices.

The Q209 average price declines affecting Abu Dhabi’s main freehold master developments have been relatively homogenous at approximately 10-12 per cent. The one exception is Hydra Village, whose prices fell only 7 per cent, on average. Generally, these declines are due to the withdrawal of high-priced properties from the market by sellers unwilling to lower prices. The departure of many high-priced units brought down the overall listing price average.

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October 2009 31

The report notes that the better than average Q209 price performance for Hydra Village is a result of the exceptional 35 per cent decrease already seen in Q109, which left less room for depreciation in Q209. As such, Hydra Village is approaching a natural price floor, because further price-cuts would result in secondary market losses for the seller.

Sale transactions have been increasing, as has the number of serious buyers in the market. As mentioned above, transactions are centered on nearly completed developments, like Al Reef Villas and Marina Square, but only where prices are close to the primary market prices.

Other nearly completed developments, like Sun and Sky Towers

deterred high sales volumes. Average secondary market listing prices for Al Raha Beach are still 10-20 per cent above primary market prices. However, isolating the bottom end of price listings (distressed/motivated sales), shows that Raha Beach developments can reach up to 5-10 per cent below primary market prices, the report points out.

After the price declines seen during

Generally, this floor price is a function of payment plans and will vary between and within developments, depending on the pricing and collection strategies set by each developer. Even after such large discounts, Hydra Village is still failing to attract secondary market buyers, mainly due to construction delays and consequent failure to meet delivery dates.

According to the analysts, endusers remain the predominant buyers of freehold property in Abu Dhabi, focused almost exclusively on nearly completed properties.

Investors, however, continue to wait for signs that the market has bottomed-out. In so doing, investors are avoiding the risk associated with uncertainty over future rental yields and sale prices of units in upcoming developments.

(expected delivery: Q2/Q310), still maintain secondary market premiums over primary market prices, but register only minimal transactions.

Average prices for Sun, Sky, and Tala Towers now have a 20-40per cent premium over primary market prices; even the low end of listings keep premiums between 15 per cent and 30 per cent. In the case of Al Reem Island, buyers prefer Marina Square for its lower prices.

Developments on Al Raha Beach have generally received less attention from serious buyers, mainly due to higher prices. One exception is the Al Bandar district, whose close completion date (Q1/Q2 2010) has made it the focal point of buyer interest on Al Raha beach. However, Al Bandar’s high prices relative to other options in Abu Dhabi’s leasehold market have

Q408 and Q109, the few transactions actually taking place are now very close to distress price levels. Price spreads between the lowest listing prices and transactions are now only 5-10 per cent. According to Landmark, In Abu Dhabi, there appears to be an average price ceiling of Dh1,300 per square foot for off-plan properties. Only a few transactions on select projects, like Sun and Sky Towers or Al Bandar, have sold above that ceiling. As first observed in Q109, many active sellers continue to resist additional discounts after recent corrections brought many properties close to their primary market prices.

Although prices may still decrease marginally, there are clear signs that a price floor is emerging and that transaction volumes now depend on the ability to acquire financing. General market confidence is also a key factor.

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October 2009

Developers have ‘learnt their lessons’ Follow examples of survivors in other markets to build differentiated capabilities

G

lobal strategic consulting firm AT Kearney believes that the awaited consolidation wave in the real estate industry in the UAE and GCC has started and that the developers demonstrate they are mindful of lessons learnt from past real estate cycles in other markets.

Companies that survived in these markets have built strong differentiated capabilities and diversified across the value chain to stabilize sources of revenues. In similar markets such as Singapore and Hong-Kong, which were

hit strongly by real estate cycle bursts in past decades, only two to three major developers survived and reinforced themselves.

Most regional markets have been confronted with strong oversupply – which peaked last year at over 100 per cent in the high-end residential and commercial segments in some GCC countries. “With most property developers being cash-strapped, with banks restricting lending and homebuyers defaulting on payments, the primary aim of consolidation is to

pool resources to enable firms survive the downturn”, says Dirk Buchta, Partner and Managing Director, AT Kearney Middle East.

Announced merger plans for Emaar and Dubai Holding; within Dubai Holding for Dubai Properties, Sama Dubai, Bawadi, Remraam and the Tiger Woods golf course; Barwa and Qatar Real Estate Investment Co; and consolidation of land from distressed developers into companies like Dubai Real Estate Corporation come as no surprise to Dirk Buchta.

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October 2009 33

However, planning for a merger is paramount to its success. He points out that almost 70 per cent of mergers fail, often due to such basics as lack of preparation, communication, unclear strategies or poor execution.

For example, in Spain recently, poor timing and planning of a merger between two major developers failed, resulting in bankruptcy for the new company within six months of the merger. Of those companies that do merge successfully only 29 perdcent achieve increased profitability. If developers are to merge, they need to ensure their company is on sound ground and research their prospective partner carefully before deciding this is the best solution.

“The main objective for a merger should not be size, which makes little sense in a quality-driven business like real estate development. The merged entities will have reinforced position on different parts of the value chain, but risks will also increase. This can be linked to a stronger focus on a risky market like Dubai, in addition to liquidity issues or “doubling” activities which will have to be rationalized.

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Most regional markets have been confronted with strong oversupply – which peaked last year at over 100 per cent in the high-end residential and commercial segments It is therefore the perfect time to review the corporate strategy of the new entities, enlightened by the new market conditions and the analysis of the growth path of most successful real estate developers worldwide such as Hines in the US, Hochtief and Nexity in Europe, or Capitaland in Asia. The time of endless growth for opportunistic projects driven solely by land and cash availability is over.

Developers will compete for buyers, and they need to define a convincing strategy why buyers should buy from them and not from the other developer.” says Olivier Laroche, senior manager with AT Kearney Middle East.

Mergers in the real estate sector typically fall into two categories; merging of similar companies, or

October 2009

merging of complementary companies.

The reasons to merge two similar companies are often to achieve synergies and operational excellence or to balance risks and diversify. While mergers focusing on achievement of operational excellence have not been common in the region, mergers focusing on balancing of risks and portfolio of assets are especially pertinent for master developers with Dubai interests, who are driven by project and investment portfolio rationalization.

The other option for companies is to use diversification along the value chain. Mergers between complementary players aiming to integrate the chain both up and downstream have occurred in the region. Most successful large western developers including Hochtief and Bouygues Group, have in the past

followed this diversification path through mergers, joint ventures and organic growth. Emaar has started following this path with the acquisition of Singapore-based Raffles for its education business and joint ventures in the construction, brokerage and facilities management segments for instance.

The success of the merger lies in key restructuring actions in terms of project portfolio and customer base.

Deyaar has shown a lot of maturity in this field compared to the lack of transparency in the region. A detailed strategy is paramount for the development of the core business of a new entity as well as a specialization strategy on development segments like low-cost housing, hospitality or retail, where specialized players dominate the market. Careful geographic diversification, first at a regional rather than on an international level, coupled with a balanced portfolio of activities and assets – both physical and financial - will be pillars for success, in line with regional markets’ evolution and competitive landscape changes.

Successful mergers can give leading Middle East players the critical mass and a competitive edge on the international scene, based on the regional market long-term potential and easier access to liquidity than most competitors worldwide. “Defining a rigorous growth strategy for the merged entity will be key to ensure shareholder and customer buy-in, but this needs to happen before the merger is actually announced,” Buchta feels.

AT Kearney also sees definite opportunities for GCC based and managed Real Estate Investment Trusts (REITs) and similar types of investment funds to attract billions in foreign direct investment into the region’s real estate markets.

REITs are structured and regulated investment portfolios made of various real estate assets from a range of asset classes and are privately or publicly owned. Their main purpose is to give individual investors access to real estate portfolio investments without

Mergers in the real estate sector typically fall into two categories; merging of similar companies, or merging of complementary companies personally owning assets and to allow for asset owners to access a broader and more liquid investor base.

“REITs are a great way to bring liquidity to the market which is particularly needed in a depressed market with distressed investors, a situation the local real estate market faces at present. REITs offer transparency and confidence to the international market, making them attractive to international institutional investors as they can diversify their investment and risk.” Dirk Buchta points out.

There are other vehicles available but public REITs are traded on stock markets with available transparent regulations, making them more trustworthy and more liquid than other forms of real estate investment.

Over 20 markets worldwide have REIT regulation, including Dubai since 2006, which has helped fueling growth with a global REIT market cap of over $700 billion in 2009.

AT Kearney’s findings show that, historically, diversified REITs have generated the highest margins when compared to other segments.

REITs are typically a medium risk investment, delivering 6 to 8 per cent returns on average. Their minimal correlation on the long-term with other asset classes makes them an attractive investment. However, when the REIT bubble in the United States burst with a dramatic correction of prices of around 65 per cent compared to their peak in 2007 (according to CBRE research), the confidence in the tool was significantly affected. But REIT managers and investors have learned their lessons and are now returning back to fundamentals, focusing on management of existing assets rather

than more risky activities, including new developments.

“An active and transparent UAE REIT market would benefit the local economy now as it provides a fresh new source of investors and capital. The valuation of real estate assets globally and specifically in Dubai are attractive, making today a very interesting time to raise funds and consolidate assets under one vehicle,” says Olivier Laroche.

“Owners will also have an opportunity to divest distressed assets to reduce their risk exposure, diversify their incomes and get alternative revenue streams.

Several funds are already focused on UAE and GCC to invest in income generating real estate assets. With time, more cash will become available across the globe, especially with long term institutional investor” added Matthieu de Clercq, senior manager Real Estate AT Kearney Middle East.

The most important factor according to AT Kearney is the fact that the local stock markets in the GCC need to differentiate and diversify, as well as generate new opportunities to attract international investment in real estate, other than the risky developers’ stocks picking. REIT and other investment vehicles will provide the GCC with new products, new investors, new capabilities and overall with a new segment strengthening it’s positioning as a financial hub globally.

“The fundamentals of the business today lie more in managing and optimizing revenues generated by existing assets and activities than by planning new developments. Structured REIT and real estate portfolios will force asset managers to develop long term and sustainable tenant management and care practices,” concluded de Clercq.

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October 2009 35

FORE X

Too early to rejoice Proper risk management of utmost importance, says broker

By Ambily Vijaykumar

T

he equities markets have seen a rally lately, but it has largely been because of the markets putting ‘higher expectations’, says Yaser Rawashdeh, senior sales trader at Saxo Bank, UAE. GDP figures contributing to the rally have been achieved mostly due to government spending and ‘it is too early to rejoice’ he says.

Saxo Bank, the online broker, which set up office in Dubai a few months back, says that the need of the hour is proper risk management for traders to ward off monetary shocks in view of the unpredictability in the markets. In an interview with Banking and Business Review, Yaser Rawashdeh shares the changing rules of trading in the markets and the future of the US dollar.

What has been the impact of the economic crisis on Forex trading?

Back in September-October last year prices were moving in big ranges and people were moving away from risk currencies like the Aussie dollar, the Kiwi, the Sterling and also the Euro.

That strengthened the Yen and the Dollar. Now volatilities are falling down and with some good months in the equity market, it has had a good effect on the currency markets. This has meant that risk currencies that were hit are picking up again.

Would it be appropriate to say that the crisis has changed the rules of the

36 BANKING AND BUSINESS REVIEW

way. When you have a position, you would have a stop or two to decide that if the level is breached, then you would get out or else your losses will cumulate and you would be forced to close at a level where you bear a lot of losses. By having risk management in place, you have the opportunity to try something new should something go wrong. The need also arises out of the fact that the market’s faith in big institutions has taken a beating.

Yaser Rawashdeh, senior sales trader at Saxo Bank, UAE

game?

They have changed the rules in the sense that in the past, the ranges were clearer with a respect for technical analysis. Now there are more unpredictable moves. Since the collapse of Lehman Brothers, levels that were considered usually strong were easily broken and unchartered territory was easily entered. The crisis has shown FX traders how bad things can get. It has had a good impact in terms of educating traders for the need of risk management.

But won’t risk management take away a trader’s ability to make more profits?

No. You would then have a clear strategy to exit should things go the wrong

October 2009

Tell us about the impact it has had on the US dollar to which the dirham is pegged?

When the crisis struck last year, the US dollar strengthened on the basis that it was a safe haven. Other currencies that were dependent on exports like the Aussie dollar or the Canadian took a beating; even gold profited to a certain extent. But now the markets are turning around and we are going back to the old ways. Interest rates on the dollar as well as treasuries are low and traders are looking for more returns on their investments. So they are now looking again at currencies like the Aussie dollar that have had a nice bounce in the last three or four months. But now and then when the indices are going down, we are seeing some positive effects on the dollar and the yen and negative effects on risk currencies and emerging market currencies. It is difficult to tell how long this will last since it is dependent on how long investors have faith in the US

dollar also considering the quantitative easing going on in the US economy. The long term effects of the easing could be negative on the dollar.

So is dollar still a safe bet?

The dollar has been strengthened as a safe bet. Of course there are a lot of issues in the US in terms of unemployment that is high, net foreign debt and that is an issue one has to look into. If a country’s net foreign debt is high and that continues to be the case, then the theoretical answer is the devaluation of the currency. But presently the dollar is a safe bet. That could be attributed to the fact that there isn’t enough faith in other currencies.

Do you attach much importance to emergence of Asian currencies as substitutes to the dollar?

Eventually you could see the Renminbi etc becoming a safe haven, but that won’t be immediate. These are economies that are fiscally and monetarily responsible. But historically, the dollar has been a safe haven and the main currency and it would continue to be so.

However, one needs to keep an eye on it with the quantitative easing going on, because the long term effects could be low growth, high taxes, and high inflation. In terms of the dollar’s position, a clear picture would emerge only in the next couple of years. Because other countries that have big reserves of the dollar would also not want the currency to lose favour.

What’s the trend emerging from the commodities market?

It has been affected largely by the return of the risk appetite into the market. Oil is around $72-73 a barrel. But we think that it has been over bought.

In terms of supply-demand, supply is at higher levels at the moment by some 15 per cent on cyclical levels. We also believe that many governments might have been filling their inventories when oil was cheap and inventory capacities are also reaching levels where it is going to be more expensive to stock it, which will result in a drop in oil prices. If you look at the fundamentals, it is very difficult to justify high oil prices. But we

are seeing a rally in oil, but by the end of the year, maybe the prices will settle around $55-60 a barrel.

China is getting conservative with imports and their stimulus package is going to take some time to show effect. If you look at the US, most of the growth of around minus one percent has come from government spending.

The consumer wasn’t doing much. The market has been reacting as if there is going to be 4 per cent GDP growth in the next six months. But where is that growth going to come from is the question.

Which are the hot cakes in the commodities market at the moment?

Sugar, for one, is benefiting from floods and droughts that have affected the crop. In terms of gold it has been volatile, but the concern is that they have long positions in the market and any kind of rise will see selling. We are also looking at high inflation so gold could be a good investment.

What about equity trading?

We have reached levels that are unjustified since markets are putting higher expectations. At the end of the day, the many GDP figures that we are seeing in Germany, France, Japan and the US, if anything good has come out of it is because of the stimulus plans and they can last only for some time and these plans are doing one sector good and hitting the other sectors. By encouraging people to buy new cars, the second hand sales as well as spare part busi-

nesses are being hit. What we are also seeing is that consumers in the US are beginning to deleverage, which means that they are repaying their debts and that will result in a cut back on spending on consumer products. So that is the reason why we think that any rallies that we are seeing is unjustified.

What is the thumb rule now for people willing to trade equities?

Choosing the sector is essential. What we are looking at is defensive sectors to be long them. As for cyclical sectors, they have gone too fast up and the banking sector has had a nice recovery, but certain commercial, retail and consumer loans may not have been priced in. We are bullish on the defensives and neutral on the banking sector and not that happy on the discretionary sector.

When do you see a recovery in the markets?

The recovery could take some time; the days of the Lehman Brothers are gone.

We believe that markets are stabilizing and we have a business cycle that shows that the contraction in world economies has bottomed but it is very depressed. We believe that the market is negative, but overall we are not bearish.

We need to look at the housing market that needs to stabilize. Unemployment would continue to rise. I do see consumer spending and confidence getting to levels that are acceptable. I also see that it could take some 18 months to see these changes. But we do believe that the worst is over.

BANKING AND BUSINESS REVIEW

October 2009 37

FINANCE

Remittance industry hit by recession Saudi Arabia remains home to region’s biggest remittance business

S

audi Arabia leads the region’s remittance industry, with the GCC remaining one of the top five players in the global remittance industry, according to Money Transfer International. The global remittance industry was worth $550 billion in 2008.

According to a World Bank report, the total remittances sent from Saudi Arabia is estimated to have exceeded $20 billion in 2008, ranking it as the second largest country in the world

38 BANKING AND BUSINESS REVIEW

(and first in GCC) in terms of remittance outflows. The US, which has been the top immigration country, is also by far the largest source of outflows, with more than $47 billion in recorded remittance transfers in 2008 while Switzerland came third at $19 billion. While no data is available from World Bank, industry experts estimate the UAE remittance market at around $10 billion in 2008 while Kuwait and Qatar markets are estimated at $5 billion each.

October 2009

In most countries, migrants do not constitute the majority of the total population. However, high dependence on oil resources and relatively small population size have led the GCC countries to rely massively on foreign workers and as a result expatriates population constitute on average more than 50 per cent of the total population with the highest being UAE and Qatar (around 80 per cent) and the lowest is Saudi Arabia (26 per cent). The strong presence of large migrant population makes the GCC

countries among the largest remitting countries both in terms of total value and in terms of percentage of GDP. The Middle East has become the fastest growing region for money transfer and remittance industry. The remittances have been growing at an annual pace of more than 15 per cent in the region compared to a global growth rate of eight percent in 2008. The sustained high growth in Middle East has been driven by many factors: the tendency of low-skilled foreign workers to leave their spouses and other family members in their home-countries to avoid high-living costs in GCC countries and the cumbersome and expensive family visa process, which discourages migrant workers to settle down with their families.

Citizenship and naturalization are virtually nonexistent in GCC countries, impeding foreign workers’ settlement on a more permanent basis like their European or US counterparts.

Hence, the ties between migrants and their countries of origin do not decay overtime, and the trend in workers’ remittances remains sustained, reports point out.

Although the growth had been significant in the past few years, the last two years have witnessed essential changes in the remittance industry in the GCC countries. Increasing inflation in the Gulf States has had an enormous impact on the remittances of expatriate workers and this situation has influenced all the countries that export labor to the region, especially India, Pakistan, Bangladesh, Indonesia and the Philippines.

While remittance per person has come down due to increasing inflation,

Middle East has become the fastest growing region for money transfer and remittance industry, growing at an annual rate of more than 15 per cent compared to a global average of eight per cent in 2008 as a whole remittances have increased as more people sought employment in these countries. Nonetheless, the rate of increase of remittances from Gulf countries is slowing but is still positive.

Pakistan and Bangladesh for instance have witnessed accelerated growth of remittances in 2009. This is in part due to the fact that the GCC countries, a major destination for Asian migrants, have not significantly reduced hiring migrants. Besides that, other reason for growth in remittances to these countries was due to falling asset prices, rising interest rates differentials and a depreciation of the local currency of these countries against GCC currencies, which are pegged to the dollar (except Kuwait) attracted investments from migrants.

While the impact of the global financial crisis on the GCC countries has definitely not been as severe as in the west, recent news events and deeper analysis into the numbers of the banks indicates they have not come out completely unscathed. Credit shrinkage, deferment of projects, significant number of layoffs across the board and a significant number of expatriates leaving the country made headlines for the six month period between October-08 and March-09. This in turn is likely to impact the remittances from these countries significantly in 2009.

As per the World Bank forecast, the remittances outflow will slowdown from GCC due to fall in oil prices lead-

ing to overall slowdown in expansion activities, layoffs from private and public sector companies due to weak outlook. The overall sentiment has turned pessimistic resulting in job losses, the expatriates currently working have either witnessed a salary cut or a job cut resulting in lower remittances as compared to earlier.

As per the latest forecast made by the World Bank the remittances flow to developing countries are expected to drop by 7-10 per cent globally from $328 billion in 2008. The World Bank forecasts a decline of around 9 per cent in remittances from GCC due to decline in economic activity and higher cost of living in these countries.

However, there are emerging signs of a bottoming out and the economies reviving. According to the revised projections by the World Bank, global economic growth is expected to rebound to 2 per cent in 2010 and 3.2 per cent by 2011 after a contraction of 2.9 per cent expected for 2009. With oil prices rising and the investor confidence reviving there are strong sign of the GCC economies on the path of recovery. Global Investment House anticipates all this would impact the remittances from the GCC positively and expects the year 2010 shall witness a positive growth rate due to a lower base and faster economic growth as projected by World Bank.

(From a report of Global Investment House)

BANKING AND BUSINESS REVIEW

October 2009 39

OPINION

UAE Company Law changes to lower cost of doing business

A major economic policy reform

By Nasser Saidi

T

he amendment and reform of the UAE Company law is a major economic policy reform measure that will lower the cost of doing business, provide incentives for new company formation and registration –particularly for the SME sector- and improve the overall investment climate.

H.H. Shaikh Khalifa Bin Zayed Al Nahyan, President of the UAE, issued a decree on 10 August 2009 amending Federal Law No 8 of 1984, the company law. The amendment removes the minimum capital requirement of Dh150, 000 for the establishment of a limited liability company (LLC) in the UAE and is retroactive to companies established on or after June 1, 2009 and allows new businesses to determine the capital required for the establishment and sustainability of their companies.

This is an important piece of legislation which provides incentives for SMEs and company formation and effectively lowers the cost of doing business. The result, over time, should be to encourage new business formation, spur entrepreneurship, increase domestic investment and promote foreign

40 BANKING AND BUSINESS REVIEW

investment. However, in a more open and competitive global environment, where capital and entrepreneurs are mobile, we also need to measure how we stack up vis-à-vis other countries in terms of the incentives and costs of doing business.

The World Bank (WB) publishes an annual report comparing business regulations in 181 countries the latest was released on 08.09.09 (Doing Business 2010). The report ranks countries according to a number of criteria and indicators associated with the cost of doing business, including fees, charges, time, number of procedures and related:

Starting a Business

• Dealing with Construction Permits • Employing Workers-Registering Property • Getting Credit • Protecting Investors • Paying Taxes • Trading Across Borders • Enforcing Contracts • Closing a Business The amendment to the UAE company law addresses one aspect of the

October 2009

overall costs of doing business as represented by the costs of Starting a Business. In the past 5 years, 115 economies around the world have simplified business startup through 193 reforms.

Many opted for low-cost administrative reforms requiring little or no change in regulation. Others went further, introducing or amending legislation. Abolishing minimum capital requirement, as the UAE has done, is considered by the WB as one of the top 5 reform features in the costs of starting a business. This is reflected in the new report which ranks the UAE among the top 10 reformers in 2008-09. Some sixty-nine economies allow entrepreneurs to start a company without putting up a fixed amount of capital before registration.

They allow entrepreneurs to determine what is appropriate for the business based on its type, the nature and risk of the activity and capital structure.

The countries implementing such reforms have seen some of the biggest spikes in new company registrations.

For example after Madagascar reduced its minimum capital requirement by more than 80% in 2006, the rate of new registrations jumped from 13% to 26%.

registration. They allow entrepreneurs to determine what is appropriate for the business based on its type, the nature and risk of the activity and capital structure.

The countries reforms havebusiness seen some of thetobiggest spikes ininnew Similarly, after Tunisiaimplementing reduced its re- suchIn the WB doing 2010 re33 in 2010 from 47 last year’s recompany registrations.

For example after Madagascar reduced its minimum capital registration.

They allow entrepreneurs to determine is appropriate the business quirements, new company registraport the UAE is in the top 10what reformers, port. The for changes have been made in registration. They allow entrepreneurs to determine what is appropriate for the business tionsbased increased by 30% betweenthan 200280%an important achievement.

The overall broadlyjumped three categories: requirement by more inrisk 2006, the rate of new registrations from 13% to of and capital based on on its its type, type, the the nature nature and and riskranking of the theofactivity activity capital structure. structure. and 26%.

2006. global UAE hasand improved Similarly, after Tunisiasuch reduced its requirements, newofcompany registrations The countries implementing reforms have seen some the biggest spikes The countries implementing such reforms have seen some of the biggest spikes in in new new increased registrations. by 30% between 2002 and 2006.Madagascar reduced its minimum capital company company registrations. For For example example after after Madagascar reduced its minimum capital In the WB doing business 2010 report the UAE is innew the top 10 reformers, an important requirement requirement by by more more than than 80% 80% in in 2006, 2006, the the rate rate of of new registrations registrations jumped jumped from from 13% 13% to to achievement.

The overall global ranking of UAE has improved to 33 in 2010 from 47 in 26%.

26%. Similarly, Similarly, after after Tunisia Tunisia reduced reduced its its requirements, requirements, new new company company registrations registrations last year’sby report. The changes have been made in broadly three categories: increased between 2002 increased by 30% 30% between 2002 and and 2006.

2006.

Starting a Business: The UAE’s rankUAE’s improved from 118 to 44 as afrom result of scrapping requirement and Starting a Business: The rank improved 118 to 44the as minimum a result capital of scrapping In doing business 2010 In the the WB WB doing business 2010 report report the the UAE UAE isis in in the the top top 10 10 reformers, reformers, an an important important a reduction in number of days and procedures the minimum The capital requirement and a reduction in number of days and2010 procedures47 in achievement. achievement. The overall overall global global ranking ranking of of UAE UAE has has improved improved to to 33 33 in in 2010 from from 47 in last year’s report.

The changes have been made in broadly three categories: Economy Starting a Business last year’s report. The changes have been made in broadly three categories: Starting aa Business: The improved from aa result Rank Procedures Time Cost (% of income per StartingYear Business: The UAE’s UAE’s rank rank improved from 118 118 to to 44 44 as asMin. capital (% of income per result of of scrapping scrapping the minimum capital requirement and a reduction in number of days and procedures (number) (days) capita) capita) the minimum capital requirement and a reduction in number of days and procedures Economy Starting a Business UAE 9 18 8.2 311.9 Economy 2009 118 Starting a Business Year Time Cost (% of income per Min. capital (% of income per UAE 2010 Rank 44 Procedures 8 15 6.2 0 Year Rank Procedures Time Cost (% of income per Min. capital (% of income per (number) (days) capita) capita)

(number) (days) capita) capita) UAE 2009 118 9 18 8.2 311.9 Dealing with Construction Permits: The cost has been reduced to half, UAE 2009 118 9 18 8.2 311.9 and reductions in UAE 2010and 44 time 8 as well; this improved 15 6.2 UAE’s ranking from 0 54 to 27. procedures the UAE 2010 44 8 15 6.2 0

Economy Dealing with Construction Permits

Dealing with Construction Permits: The cost has been reduced to half, and reductions in procedures and time Dealing with Permits: The cost has been to YearConstruction Rank Time (days) Cost (% of income per capita) Dealing with Construction Permits: The been reduced reduced to half, half, and and reductions reductions in in as well; this improved the UAE’sProcedures (number) ranking from 54 to 27. cost has

procedures and well; UAE’s from procedures and time time as as well; this this improved improved the the UAE’s ranking ranking from 54 54 to to 27.

27.

2009 54 21 97 63.9

UAE Economy Economy UAE

Dealing with Construction Permits Dealing with Construction Permits 2010 27 17 64 Year Rank Procedures (number) Time (days) Year Rank Procedures (number) Time (days)

30.7 Cost (% of income per capita) Cost (% of income per capita)

UAE UAE UAE UAE

2009 2009 2010 2010

63.9 63.9 30.7 30.7

54 54 27 27

21 21 17 17

97 97 64 64

Trading Across Borders: Decrease in number of documents and time for export, combined with a reduction in cost to import and export by container; the UAE’s ranking improved to 5 from 13 previously.

Trading Borders: Economy Trading Across Borders Trading Across Across Borders: Decrease Decrease in in number number of of documents documents and and time time for for export, export, Trading Across Borders: Decrease in number of documents and time for export, combined with a reduction in cost to import combined with a reduction in cost to import and export by container; the UAE’s ranking Year Rank Documents to Time to Cost to export Documents to Time to Cost to import combined with athe reduction in cost to import and export by container; the UAE’s ranking andimproved export by container; UAE’s ranking improved to 5 from 13 previously.

13 . export export (US$ per import import (US$ per improved to to 55 from from 13 previously previously . (number) (days) container) (number) (days) container) Economy Trading Across Borders Economy Trading Across Borders UAE 2009 Year 13 Rank 5 Documents to 9 Time to 618 Cost to export 7 Documents to 9 Time to 587 Cost to import Year Rank Documents to Time to Cost to export Documents to Time to Cost to import export export import import (US$ per UAE 2010 5 4export 8export (US$ per 593 5 9 (US$ per import import 579 (US$ per (number) (days) container) (number) (days) container)

(number) (days) container) (number) (days) container) UAEThrough 2009the 13 company 5 9 and other 618 measures, the 7 UAE has improved 9 587 reform act its UAE 2009 13 5 9 618 7 9 587 UAErankings.

2010However, 5 4 8 593 5reforms with the 9 overall 579 the UAE should aim at additional objective UAE 2010 5 4 8 593 5 9 579 of improving the ease of doing business; of making the UAE even more business

friendly. the company reform act and other measures, the UAE has improved its Through Through the company reform act and other measures, the UAE has improved its We have run three simulation scenarios of the effect of additional reform measures on the rankings. rankings. However, However, the the UAE UAE should should aim aim at at additional additional reforms reforms with with the the overall overall objective objective Through the company reform act and other measures, the UAE has improved UAE’s ranking in the WB league tables on the Ease the of Doing Business. of the of making UAE even more business The countries implementing of improving improving the ease ease of of doing doingitsbusiness; business; of making the UAE even more business rankings. However, the UAE should aim at additional reforms with the overall friendly. friendly. objective of improving the ease of doing business; of making the UAE even more such reforms have seen some scenarios We of friendly.

We have have run run three three simulation simulation business scenarios of the the effect effect of of additional additional reform reform measures measures on on the the of theUAE’s biggest spikes in new ranking in the WB league tables on the Ease of Doing Business.

We have run three simulation scenarios of the effect of additional reform measUAE’s ranking in the WB league tables on the Ease of Doing Business.

company registrations

ures on the UAE’s ranking in the WB league tables on the Ease of Doing Business.

BANKING AND BUSINESS REVIEW

October 2009 41

Policy Reform Simulation 1: Reducing Time Time & Procedures of Starting a Business Policy Reform Simulation 1: Reducing & Procedures of Starting a Business Ease of Doing

Starting a Business

Business Policy Reform Simulation 1: Reducing Time & Procedures of Starting a Business Economy

New Zealand

RANK Percentile Procedures 0.07 4 (number) 2 0.08 1

Cost (% of income per capita) Time Cost (% of 4 0.71 (days) income per 1 0.39 capita)

Min. capital (% of Ease of starting a Ease of income per business (percentile) starting capita) RANK Min. capital (% of Ease of starting a Ease of 0.0 0.12 3 income per business (percentile) starting - capita) 0.00 1 RANK

United States Singapore

Economy Singapore

RANK Percentile Ease of Doing Business

Procedures Time Starting a Business (number) (days)

1

31

0.12 0.07

64

64

0.71 0.71

- 0.0

0.06 0.12

23

Hong NewKong, Zealand 4 2 China United States 3 Denmark Hong Kong, 5 4

0.13 0.08

51

111

1.98 0.39

0.0 -

0.19 0.00

41

0.12 0.16 0.13

6

6

0.71

45

6 11

0.06 0.21 0.19

2 54

UAE (2009) China

47

0.41

9

18

- 1.98 8.20

40.1 0.0 311.9

0.53

118

UAE (2010) Denmark

335

84

156

6.20 -

0.16

UAE (2009) 47 0.41 9 UAE 29 2 UAE (2010) 33 8 (Additional reforms) UAE 29 2 (Additional Thereforms) first policy reform simulation

3

18

- 40.1

8.20 0.53 6.20

15 3

-

0.53

445

0.21

311.9

0.53

2

118

-

44

-

2

Starting a Business would improve to 2 and an important category for the UAE, given was to reduce the time and procedures of the overall rank in Ease of Doing Business its large real estate sector. Reducing the Starting a Business to the average of the would move up to 29 from the current 33. number of procedures (from 17 to 10), top three countries for this sub-category Another quick win is reforming dealing time and cost to the average levels of the firstCanada policy simulation was to with reduce the timepermits. and procedures Starting a raises the (NewThe Zealand, andreform Australia).

As with licenses, construction top-ranked of in this sub-category Business ofofthe “Dealing top three countries for this sub-category Zealand, a result, the rank to of the UAEaverage under Ease with Construction Permits” is ranking (New of UAE to 30.

The first policy reformAs simulation wasrank to reduce theunder time and ofa Starting

Canada and Australia). a result, the of UAE Easeprocedures of Starting Businessa

Business to thetoaverage of the top three countries this Business sub-category (New Zealand, would improve 2 and the overall rank in Ease offor Doing would move up to 29 Canada and Australia).

As a result, the rank of UAE under Ease of Starting a Business from the current 33. would improve to is 2 and the overall rankwith in Ease of Doing would move up to 29 Another quick win reforming dealing licenses, with Business construction permits. from the current 33.

“Dealing with Construction Permits” is an important category for the UAE, given its Another is reforming withof licenses, with(from construction permits. large real quick estate win sector.

Reducing dealing the number procedures 17 to 10), time and cost “Dealing with Construction Permits” is an important category for the UAE, its to to the average levels of the top-ranked in this sub-category raises the ranking given of UAE large real estate sector. Reducing the number of procedures (from 17 to 10), time and cost 30. to the average levels of the top-ranked in this sub-category raises the ranking of UAE to 30.

Policy Reform Simulation 2: Dealing with Construction Permits Policy Reform Simulation 2: Dealing with Construction Permits

of Doing 2: Dealing Dealing with Permits Policy ReformEase Simulation withConstruction Construction Permits Business

Economy

RANK Percentile Ease of Doing Business

Economy

RANK

Procedures Time Cost (% of income Ease of dealing with Dealing with Construction Permits (number) (days) per capita) licenses (percentile)

Percentile

Procedures (number)

Time (days)

Ease of licenses RANK

Cost (% of income Ease of dealing with per capita) licenses (percentile)

Ease of licenses RANK

Singapore

1

0.07

11

38

21.22

0.07

3

New Zealand

2

0.08

7

65

25.81

0.07

3

0.07 0.12 0.08 0.13 0.12 0.16

1911 7 15 6 19

4038 65 119 6940

21.22 13.11 25.81 18.71 13.11 60.94

0.07 0.23 0.07 0.21 0.23 0.11

273 3 21 8 27

0.13 0.41 0.16

15 21 6 17 21 10 17

119 97 69 64 97 55 64

18.71 63.90 60.94 30.70 63.90 15.17 30.70

0.21 0.31 0.11

21 54 8 27 54 1 27

Singapore United States 31 New Zealand 2 Hong Kong, China 4 United States Denmark 53 Hong Kong, China 4 UAE (2009) 47 Denmark 5 UAE (2010) 33 UAE (2009) 47 UAE (Additional 30 UAE (2010) 33 reforms) UAE (Additional

0.41

30

10

reforms)

42 BANKING AND BUSINESS REVIEW

October 2009

55

15.17

0.31

1

What if both sets of the above-mentioned policy reforms are undertaken? Then the UAE’s Ease of above-mentioned Doing Businesspolicy global ranking ness dramatically improves from improves from today’s 33 global ranking dramatically What ifoverall both sets of the reforms today’s 33 to 24. to 24. are undertaken? Then the UAE’s overall Ease of Doing BusiPolicy Reform Simulation 3: Starting a Business & Dealing with Construction Permits Policy Reform Simulation 3: Starting a Business & Dealing with Construction Permits Ease of Doing Business

Starting a Business

Dealing with Licenses

Economy

RANK Percentile Procedures Time Cost (% (number) (days) of income per capita)

Min. capital (% of income per capita)

Ease of starting a business (percentile)

Ease of Procedures Time Cost (% starting (number) (days) of RANK income per capita)

Ease of dealing with licenses (percentile)

Ease of licenses RANK

Singapore

1

0.07

4

4

0.71

0

0.12

7

11

38

21.22

0.07

3

New

2

0.08

1

1

0.39

-

0

1

7

65

25.81

0.07

3

3

0.12

6

6

0.71

-

0.06

5

19

40

13.11

0.23

27

Hong Kong, 4 China

0.13

5

11

1.98

0

0.19

8

15

119

18.71

0.21

21

Denmark

0.16

4

6

-

40.1

0.21

9

6

69

60.94

0.11

8

0.41

9

18

8.2

311.9

0.53

118

21

97

63.9

0.31

54

UAE (2010) 33

8

15

6.2

-

44

17

64

30.7

27

UAE (Additional reforms)

2

3

0.53

-

2

10

55

15.17

1

Zealand United States

5

UAE (2009) 47

24

The amendment and reform of the UAE Company law is a major economic policy reform The amendment and reform of the measure that will lower the cost of doing business, provide incentives for new company UAE Company law is a major economic formation and registration –particularly for the SME sector- and improve the overall policy reform measure that will lower investment climate. The timing of the reform is also propitious as it provides a needed the cost of doing business, provide instimulus to business activity helping the country recover from the effectscentives of the for global new company formation ‘Great Recession’. However, this is also the time to take additional reform measures and registrationto–particularly for the stimulate new business formation, including a one stop shop and online SME registration sector- and improve the overall procedures, dealing with construction permits, and other simplified registration investment climate. The timing of the reform is also propitious as it provides formalities. More important would be the deeper structural reforms aiming at better a neededat stimulus enforcement of contracts and reforming insolvency law and procedures aiming easingto business activity the costs of Closing a Business. We should aim at easing both entry andhelping exit ofthe country recover from the effects of the global ‘Great Recession’. businesses reducing cost and minimising uncertainty.

However, this is also the time to take additional reform measures to stimuThe writer is Chief Economist with Dubai International Financial Centre late new business formation, including a one stop shop and online registration procedures, dealing with construction permits, and other simplified registration formalities. More important would be the deeper structural reforms aiming at better enforcement of contracts and reforming insolvency law and procedures aiming at easing the costs of Closing a Business. We should aim at easing both entry and exit of businesses reducing cost and minimising uncertainty.

The writer is Chief Economist with Dubai International Financial Centre

BANKING AND BUSINESS REVIEW

October 2009 43

200-year old bank has 12,100 offices all over the world and more than 150 million customers

FROM THE GATE

G

lobal Fortune 500-listed State Bank of India (SBI) has started providing the full range of banking services from its base in the Dubai International Financial Centre (DIFC).

SBI, which is India’s top bank, has received a full banking licence from the regulator, the Dubai Financial Services Authority (DFSA), which enables the DIFC branch to accept deposits and provide credit, subject to the regulations of the DFSA. Over the past year, an increasing number of banking and financial institutions from major Asian emerging markets like India have been establishing a presence in DIFC. India’s number-one bank has also obtained a retail endorsement to its licence, which enables it to arrange investments for retail customers and offer credit to small and medium enterprises (SME).

SBI‘s DIFC branch will provide trade finance and short-term working capital loans including Letters of Credit (LC) and bank guarantees, term loans, project finance and as well as syndication of credit requirements at highly competitive rates. The branch has a special desk to handle LC

44 BANKING AND BUSINESS REVIEW

State Bank of India’s DIFC unit launches corporate banking related activity.

The branch can arrange and advise on the investment products of the State Bank Group and other fund houses. It can also accept deposits from non-UAE-based professional clients and corporates in US dollars, Euros and GBP. According to Dr Omar Bin Sulaiman, Governor of the DIFC and Vice-Chairman of the UAE Central Bank, the expansion of the SBI’s services out of DIFC is a clear testimony to the vast opportunities that the region’s financial services industry offers banking firms.

The team at SBI - DIFC branch is headed by Chief Executive Officer AJ Vidyasagar, who says the bank would provide top-class corporate banking services to clients in keeping with State Bank of India’s tradition of delivering safe, and transparent and regulatory-compliant products.

“SBI has upgraded its operations in the region despite the present economic downturn, which reflects our immense faith in the potential of the UAE and the wider market and also in our own ability to do profitable business under any circumstances. The trading and industrial community in

October 2009

the Gulf consists of many companies with an Indian connection, which is a base for the bank to further build its business across the wider region,” Vidyasagar said.

Supported by its group headquarters based in India, SBI provides corporate banking services in the region.

The bank’s Corporate Banking Group in India has extensive experience in handling credit requirements of large corporates as well as infrastructure financing. The bank is the leading lender in India for project finance, with more than 490 of India’s top corporates banking with SBI. SBI is a 200-year old financial institution, which has earned high levels of customer trust and the respect of its competitors by following prudent banking practices. The bank has an international presence in 92 locations spread over 32 countries and continues to grow at an aggressive pace. It has around 12,100 offices all over the world and more than 150 million customers.

Along with its Associate Banks, SBI has 16,900 offices and 15,000 ATMs; all of them networked. In July this year, the bank opened 154 branches and 2151 ATMs simultaneously across the country though online activation.

ENERGY

Beyond oil market downturn Report says oil companies can gain competitive advantage by thinking long term

R

ecessions don’t last long when compared with the average length of energy investments; therefore any forecast of the profitability of capital investment whose output will go on stream perhaps seven to nine years from now must look beyond the shortterm, a new report by Booz & Company concludes.

Following years of high oil prices, many international oil companies (IOCs) and national oil companies (NOCs) have amassed piles of cash, and are in an excellent position to take the long-term view. NOCs controlling reserves of cheap oil but lacking the technology and capabilities to further their investment efforts should consid-

46 BANKING AND BUSINESS REVIEW

er acquiring independents and weakened oil service providers. “Meanwhile, independents in weak financial positions might decide to partner with cash-rich IOCs or NOCs,” comments Georges Chehade, a partner at Booz & Company.

In July 2008, oil prices per barrel reached an all-time high of more than $147 and analysts forecasted prices of over $200 by December 2008. But by December, the price of oil had dropped almost 80 per cent, to less than $34.

Always difficult to forecast, energy prices have reached a completely new level of unpredictability in the last few months.

“Energy companies whose economics depend on future oil prices must

October 2009

make investment decisions. In the long term, the average price of oil is a lot more stable and more predictable than its daily spot price - this long-term average is what determines the profitability of energy investments,” explained Chehade. The global liquidity shortage is leading financial markets to underprice long-term value, presenting an opportunity for companies with cash to make these investments now.

The report points out that oil prices are now seriously depressed. The effects the downturn is causing will last longer than the recession itself and the duration of typical economic recessions are short when compared with upstream oil investment standards: The mean duration of all US. recessions since 1854 is

In July 2008, oil prices per barrel reached an all-time high of more than $147 and analysts forecasted prices of over $200 by December 2008 17 months from peak to trough, and the average is just 10 months for the 10 recessions since the end of World War II. It takes at least seven to nine years for energy exploration efforts to bear fruit in the form of oil or gas coming on stream. What really matters for these investments is the price at which future oil or gas will be sold. Energy prices tend to revert over time to some longterm mean and this more stable and predictable than the day-to-day spot price.

A realistic picture of long-term petroleum price relies on long-term projections of supply and demand. Long-

term demand is almost as predictable as short-term prices are erratic. Global oil and gas consumption rates have displayed a constant upward trend for more than 30 years, and the trend is expected to continue at roughly the same pace in the future. This leads to an oil demand forecast of about 100 million barrels per day by 2020, up from today’s 85 million or so, plus 65 million barrels of oil equivalent (BOE) per day of natural gas, up from close to 55 million today. To meet this demand, more than half of the total production by 2020 will need to come from new investments.

Today there are more than 1.2 tril-

lion barrels of proven oil reserves in the world (including about 800 billion in cheap reserves in the Middle East and North Africa). Yet the long-term supply curve is a lot tighter than these figures suggest, because only so much oil (or gas) per day can be pumped. “Newer, more expensive hydrocarbon sources will have an increasingly large role to play - given the forecast demand and available sources, the long-term central equilibrium price for the next 10 to 15 years will probably be around $60 to $80 a barrel,� Chehade stated.

There is a very high probability of another big price spike within the next decade. Today, in addition to low oil prices, companies are facing a global liquidity shortage. It is likely that many companies will reduce their exploration and production investments, even though more investment is required to meet future demand; which will likely prompt a massive price increase and

BANKING AND BUSINESS REVIEW

October 2009 47

reward those who can keep their heads cool enough to take the long-term view.

Opportunity

The oil price collapse is having a cooling effect on many companies’ investment plans. Recently, most oil companies gradually increased the base forecast price on which they estimated the profitability of their investments - a number of the projects initiated under these assumptions are now being questioned and even abandoned.

The picture is particularly gloomy for many upstream oil independents: “With rapidly falling market value of their assets and the levels of financial leverage they took on during the recent boom, many may be forced to downsize, be acquired, or simply go out of business,” said Chehade.

A few top players are taking a longer view, particularly in their upstream investments. Several leading IOCs and NOCs, including Chevron, Shell, Total, and Saudi Aramco, have stated their intention to maintain their current levels of upstream investment, and some have already started to take the offensive.

Companies with cash and the willingness to invest will encounter a much more favourable cost environment than in recent years. First, liquiditystarved markets tend to grossly underprice long-term value, especially in the case of highly leveraged independents: Their debt is difficult to refinance in the

48 BANKING AND BUSINESS REVIEW

current market conditions, and is pulling their market valuations down substantially. The sharp share price drop in a number of upstream independents means they can now be acquired for a fraction of what they would have cost a few months ago.

Second, because so many companies are stepping down their investments, scores of experienced engineers working for IOCs and oil independents may be let go, while providers of oil-field services (OFS) and engineering, procurement, and construction (EPC) services will likely be forced to cut prices. Taking advantage of these, some companies have already stated their intention to renegotiate the cost of their capital proj¬ects with suppliers.

Third, the cost of the raw materials required for most large upstream projects has fallen dramatically. “If there ever was a good time to invest in

October 2009

Global oil and gas consumption rates have displayed a constant upward trend for more than 30 years, and the trend is expected to continue at roughly the same pace in the future building oil upstream capabilities and infrastructure, this would be it,” stated Chehade.

Certain aspects of a successful strategy for the times ahead will be common to all players: In this credit-starved environment, they should focus on carefully managing their working capital, controlling their costs, and fine-tuning business processes to maximize and accelerate cash flows. In sorting the various players into four categories, depending on their competitive and financial advantages, it is easier to discover, what the appropriate strategic action for each group is.

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

Tel: 04 3512200 Fax: 04 3511555 04 3080000 (Toll free)

Country Executive Head of Consumer Banking Head of Private Clients Head of Global Market Head Commercial Client Coverage

04 5062601 04 5062801 04 5062301 04 5062551 04 5062701

Abu Dhabi Corner of Hamdan and Salam Streets P.O. Box: 2720, Abu Dhabi, United Arab Emirates

Tel: 02 6963000 Fax: 02 6963001

Sharjah Abdul Aziz Al Majid Building, King Faisal Street P.O. Box: 1971, Sharjah, United Arab Emirates

Tel: 06 5594900 Fax: 06 5591009

Abu Dhabi Commercial Bank Head Office: Abu Dhabi Mall P.O. Box 939, Abu Dhabi Tel: 02 6962144 Fax: 02 6450384 Branches Al Salam Omar S. Al Tamimi Manager 02 6962486, 02 6666311 Khalidiya 02 6669910 Al Bayah Khaled Al Mannaei Manager 02 8721300 Al Dhafra Yaqoob Al Dosari (Edgar Ruaya / GM in charge) 02 5851030 Al Muroor Ramzi Al Rimawi Manager 02 4444216 Al Shahama Hazim Al Suwadi Manager 02 5633424 GHQ Essam Husain Al Habshi Manager 02 4415626 Tourist Club Area Hadia Dalloul Manager 02 6725178 Hamdan Abdalla Al Jaberi Manager 02 6335820 Sh. Rashed Road Mohamed Al Dosari Manager 02 6213237

Corniche Ghassan Kandalaft Manager 02 6275111 Mussafah Firas Al Eid Manager 02 5544272 Baniyas Town Manager Hamad Salem Rashid Al Junaibi Manager 02 5821550 Ruwais Mohammad Ismail Manager 02 8775015 Zayed Town Dhababa Rashed Obaid Al Mansouri Manager 02 8846180 Gayathi Haraba Al Mazroui Manager 02 8742155 Al Baya Ottakath C Mohamed Kutty Manager 02 8721300 Al Ghuaifat Pay Office Ottakath C Mohamed Kutty Manager 02 8723499 Al Ain Main Branch Mohd. Al Darmaki Manager 03 7543413 Al Ain Khalifa Street Salim Al Darmaki 03 7511322 Sinaeyah (Indust. Area) Salem Ahmed Manager 03 7210064 Al Wagan Nayla Al Ameri Manager 03 7352100 Al Yahar Khamis Sulum Abdun Khamis Manager 03 7815600 Al Hayer Khalid Omar Eissa Manager 03 7322557 Riggah Mudhi Al Haj Manager 04 2956969 Karama Omran Abbas Taimour Manager 04 4055135 Mina Hosam Al Refay Manager 04 3984444 Naif Ms. Seema Mohd. Malk Manager 04 6024110 Al Ettihad Salem Ali Khammas Jammahi Manager 04 3615151 ext. (202) Al Qusais Fahd. M. Baroudi Manager Manager 04 2634244 Sharjah Main Ms. Wissam Moaded Manager 06 5737737 Farah Al Ulama Manager 06 5566169 Abdulla Al Shamsi Manager 06 5433300 Abdullah Fayez Al Shamsi Manager 06 5432006 Ajman

BANKING AND BUSINESS REVIEW

October 2009

49

Yasmeen Alabid Manager RAK Aisha Ahmed Ghareib Manager Fujairah MohdAli Hassan Mohd Al Bloushi Manager Dibba Rania Yousef Manager Contact Centre Ahmed Abdo Manager Eissa Al Suwaidi Eirvin Knox Ala’a Eraiqat Thirry Bardury Deepak Khullar Seumas Gallacher Zaki Hamadani Sultan Al Mahmoud Abdirizak Ali Alok Kakar Robert Price Walter Pompliano Howard Gaunt Jasim Al Darmaki Arup Mukhopadhyay Ahmed Barakat Yaser Mansour

Simon Copleston

06 7442111 07 2335500 09 2224324 09-2446700 800-2030

Chairman CEO Deputy Chief Executive Officer Head Operations & IT Chief Financial Officer Head - Investment Banking Head - legal & Special Assets Head - Human Resources Head - Internal Audit Head - Corporate Finance Division Head - Credit Head - Financial Institution & Intl. Division Head - Business Banking Head - Government Relations Head - Retail Banking Head - Wealth Management Head - Corporate Communications, Director of Chairman’s Executive Office & Senior Vice President General Counsel & Board Secretary

Tel 02 6343000 Fax 02 6342222

Established on 20th May 1997 as a Public Joint Stock Company through the Amiri Decree No. 9 of 1997. The bank commenced commercial operations on 11th November 1998, and was formally inaugurated by His Highness Sheikh Abdulla Bin Zayed Ak Nahyan, UAE Minister of Information and Culture on 18th April 1999. All contracts, operations and transactions are carried out in accordance with Islamic Shari’a principles.

Branches Abu Dhabi Main 02 6168118 Aref Ismail Al Khouri Manager Mushref 02 4455177 Ezzeldin Nagdy Manager Madinat Zayed 02 6100821 Mohamed Yousef Manager Khalidiya Ladies Abu Baker Omar Manager Sheikha Al Suwaidi Manager Khalifa Street 02 6100590 Omar Aqel Manager Al Ain Sinaiya 03 7211777 Omar M. Basheer Manager Clock Tower Branch 03 7076444 Ali Abdullah Al Manager Dhaheri Al Jimi Mall Branch 03 7633500 Ahmed Abdullah Manager Al Boloshi

50 BANKING AND BUSINESS REVIEW

04 2611116 04 3973333 04 4033400

Fujairah Fujairah 09 2222711 Fahad Al Shaer Manager Dibba 02 6100920 Ali Mohammed Manager Ras Al Khaimah 07 2284448 Saif Hamdan Alkeem Manager Sharjah 06 5075100 Ali Essa Alshaqoosh Manager

Al Ahli Bank of Kuwait - Dubai Head Office: Kuwait Regional Head Office: Dubai Tel 04 2681118 Opposite Hamarain Centre, Deira Fax 04 2684445 P.O.Box 1719, Dubai, E-mail: infodubai@ahlibank.ae Website: www.ahlibank.ae Management & Senior Personnel: Vikram Pradhan General Manager, UAE Vijay Shah Head of Trade Finance & Operations Hiranand Motwani Manager Treasury Krishna Kumar Manager Retail Operations

American Express Bank Ltd

Abu Dhabi Islamic Bank Head Office: Abu Dhabi Najda Street, P.O. Box 313, Abu Dhabi UAE Email: customerservice@adib.ae Website : www.e-adib.com

Dubai Al Twar Ibrahim Alqasser Manager Opposite Deira City Center Hashim Al Zarooni Manager Shk. Zayed Rd. Mohamed Hussein Zainal Manager

October 2009

Representative Office, Suite 509 Tel: 04 3975000; Fax: 04 3976986 The Business Centre, Khalid Bin Al Waleed Street, Bur Dubai P.O. Box 3304, Dubai.

Prabir A. Biswas

Director & Chief Representative Sumit.K.Roy Director-financial institution group John A. Smetanka Head-wealth management-subcontinent and

global NRI

Arab African International Bank Head Office: Cairo, Egypt.

Regional Head Office Dubai Tel: 04 3937773 ART Tower, Al Mina Street, Opp. Ports & Customs Bldg., Bur Dubai P.O. Box 1049, Dubai Fax: 04 3937774 Swift ARAIAEAD, E-mail: aaibdxb@emirates.net.ae Web: www.aaib.com History: Established 1964 as the first Arab joint venture bank Hemant Jethwani General Manager UAE Dubai Branch: Key Executive Alaa Sobhy Head of syndication and assert trade Abu Dhabi Tel: 02 6323400; Fax: 02-6216009 Arab Monetary Fund Bldg, Corniche Street, P.O. Box 928, Abu Dhabi Key Executive Hani Hassan Branch Manager

Arab Bank Head Office Jordan – Amman Tel: 04 2950845; Fax: 04 2024369 P.O.Box 950544, 950545 Amman 11195 Website: www.arabbank.ae History: The Arab Bank Group is one of the principal financial institutions in the Arab world and ranks among the leading international banks in terms of equity, earnings and assets. Established in 1930 in Jerusalem. The Arab Bank Group is

owned by about 4,000 shareholders from all over the world, mainly Arab countires.

The Group has a diversified network of over 350 branches worldwide.

Abdul Majeed Shoman Chairman Abdel Hamid Shoman Deputy Chairman & Chief Executive Officer U.A.E Area Management Mohammad A . Azab Senior Vice President - Dubai Saed Jarallah Senior Vice President – Abu Dhabi Aladin Al-Khatib Treasury Head Hatem Kurdieh Corporate Banking Head Tareq HajHasan Retail Banking Head Mohammad Mattar Central Operations Unit Manager Hani Hirzallah Regional Manager Human Resources /Gulf Region Tareq Ibrahim Head of Human Resources Ammar Al Khayyat Financial Controllar Ghassan Nimer IT Center Regional Manager Jihad Ghoury Legal Counsel Sanjay Malhotra Global Head of Marketing & Product Develeopment Nasser Maghtheh Senior Auditor Anan Al Khatib Premises & Pruchasing Officer (Engineer) Suleiman Malhas U.A.E Branches Audit Centre Manager Dubai Al Ittihad Street Mohammed Azab

04 2950845

Branch Manager

Mir Asif Ali Mgr - Treasury Dept Saidi Zoubir Head of Business Dev. Dept.

Tareq S’adi Al Darras Mgr - Credit Risk Management Issam Abugisseisa Legal Advisor Abu Dhabi Main, Sh. Hamdan Street Noora Ebrahim Manager -Sales & Services Souk Branch Al Masaood Building - Khalifa Street, Abu Dhabi Nasser Rashed Al Ali Manager

Dubai Arbift Tower, Baniyas Street, Deira Adel Mohd. Khalfan Manager Al Bagh

04 2220151

Sharjah King Faisal Street Fatima Al Muani Manager

06 5744888 06 5747766

04 2282071

04 2221231

Arab Banking Corporation

Abu Dhabi Al Naser Street Nasser Serries Branch Manager

02 6392225

Abu Dhabi Office Office, 10th Floor, Abu Dhabi Trade Centre, Abu Dhabi Mall P.O.Box 6689, Abu Dhabi Mohamed El Calamawy Chief Representative

Al Ain Colock Tower roundabout, Al Ain Street Maen Jarrar Branch Manager Sharjah Al Arooba Street Maher Al Debis Branch Manager

03 7641328

Ajman Rashid Bin Humaid Street Modhar Kherfan Branch Manager

06 7422431

Ras Al Khaimah Oman Street, Al Nakheel Ali Zatar Branch Manager

07 2288437

Fujairah Sheik Zayed Street Abdel Hamid Qamhieyah Branch Manager Call Centre Within UAE Outside UAE

09 2222050 800 40 43 009714 2953889

Arab Bank for Investment and Foreign Trade Abu Dhabi Tel 02 6721900 Regional Head Office, Sh. Hamdan Street, Tourist Club Area Fax 02 6785271 P.O. Box 46733, Abu Dhabi Telex 22455 ARBIFT EM Email: arbiftho@emirates.net.ae Website: www.arbift.com History: Established in 1976 in Abu Dhabi Registered as a Puvlic Joint Stock Company Management & Personnel Ibrahim N. R. Lootah General Manager 02 6952286 Hassan S. Kishko Head of Finance 02 6721299 M.A. Majid Siddiqui Head of HR & Admin 02 6728785 Khalid Mohammed Bin Amir Head of Operations 02 6776109 Najib Taleb Nasser Head of Commercial Banking Ahmed Majid Lootah Head of Retail Banking 02 6743801 M. Santosh Babu Senior Manager IT 02 6722975 Izzeldin Al Siddiq Salem Mgr - Inspection & Internal Audit 02 6780592 Osman Hamid Suliman Mgr - Banking Relations Dept 02 6787380

02 6275087

Al Ain 03 7655133 Mohd. Sultan Al-Darmaki Bldg., 1st Floor, Old Passport Office Road.

Hussain Marzouqul Manager 03 7656482

Deira Mohammed Elayyan Branch Manager

06 5618999

02 6721600 02 6723763 02 6720886 02-6791642 02 6721900 02 6780423 02 6269500

02 6447666 Fax 02 6444429

Arab Emirates Investment Bank PJSC Head Office: Cairo Egypt Regional Office: Dubai ART Tower, Al Mina Road, Opposite Maritime City, Bur Dubai P.O Box 1049 Dubai SWIFT: ARAIAEAD E-mail: aaibdxb@eim.ae Web: www.aaib.com

Tel: 04 3937773 Fax: 04 3937774

Management-UAE Hemant Jethwani General Manager Alaa Sobhy Head of Syndication and Asset Trade Mahendran Raman Head of Operations and Liabilities Abu Dhabi Branch Tel: 02 6323400

Fax: 02 6216009 Arab Monetary Fund Bldg., Corniche P.O Box 928, Abu Dhabi

BLOM Bank France SA Dubai Tel 04 2284655 Al Maktoum Street, Deira Dubai, P.O. Box 4370 Fax 04 2236260 email: info@blomfrance.ae www: www.blombank.ae Bassem Ariss Regional Manager 04 2222355 Samir Hobeika Branch Manager 04 2214648 Michel Germanof Manager Corporate Credit UAE 04 2242067 Mohammad M Ansari Treasurer 04 2224812 Sharjah PO Box 5803, Al Buheira Tower, Al Buheira Corniche Tel 06 5736100

Fax 06 5736080 Mokhtar Kassem Branch Manager

BANKING AND BUSINESS REVIEW

October 2009

51

Bank Muscat Dubai Representative Office Dubai Creek Tower, Baniyas Road, Deira P.O. Box 29969, Dubai Lawrence P. Monteiro Chief Representative

Tel 04 2222267 Fax 04 2210115

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,

52 BANKING AND BUSINESS REVIEW

October 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

October 2009

53

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

54 BANKING AND BUSINESS REVIEW

October 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

October 2009

55

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

56 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

October 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

October 2009

02 6346888 02 6422600 06 5730004

57

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

58 BANKING AND BUSINESS REVIEW

October 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 Fujairah 09 2221100 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

October 2009

59

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

60 BANKING AND BUSINESS REVIEW

October 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

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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

62 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

October 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 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

Tel 02 6741600 Fax 02 6786080

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

October 2009

63

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

October 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