The Banking sector of Dubai has quiet been under the effects of the macroeconomics numbers of the UAE. The gone by quarter of 2013 has not been favorable for the operating banks in Dubai; despite advent of many foreign banks displaying interest in opening their branches in here.
However, globally recognized auditors like Moody’s and Deloitte are convinced through their researches and studies that the Banking sector has moved towards growth path and display an ambitious outlook in the upcoming quarters of 2014.
Let us a deep probe into the Banking sector of Dubai, UAE and reveal factors behind the UAE’s Bank growth trajectory.
The Banking Industry in Dubai: A Snapshot
The Banking Industry in Dubai, a prospering city in UAE, is highly affected by the macro economical entities of the country. As per the hard facts, there are a total of roughly 25 local banks and 30 foreign banks that are operating in the UAE. The total combined network of the banks operating in the UAE sums up to 650 branches.
The economy of the UAE was never this good but with the timely intervention of the government, the focused sectors like Travel and Real Estate witnessed a quick boost. Thereby, the fiscal situation of the UAE is now unmatched and possess an enviable stature. Apart from this, the government also injected a good share of liquidity into the financial institutions, which has actually normalized the dark effects of turbulent economic situations.
Government Initiative for UAE Bank Network’s Facelift
Digging the proven dark quarters for UAE’s economy, which was from 2009-2010, the economy was marred by the sharp hit of recession. The profitability of the banking sector suffered a lot and year-on-year comparatives in Q1 2010 showed disappointing figures. However, as they say “It’s better late than never”, government immediately started directing initiatives towards economic diversification so that the Banking domain can also flourish.
The government initiative has elevated the drooping condition of the banking domain to such an extent now that the UAE has now the highest degree of financial intermediation and aggregate asset numbers. The banking sector has the highest penetration in the UAE and that can be seen in the relatively developed banking infrastructure.
Some of the latest initiatives involve UAE government incurring in AED120 billion for banks stationed in Dubai and other parts of the UAE. Such initiative will definitely provide a short term liquidity relief and thus there will be assurance that banks in Dubai successfully meet their current funding requirements.
Apart from this, there are several big global banks, enchanted by the prospering economy of Dubai, who have proposed of stationing their branches in here. This has not only increased the UAE’s brand value but has also paved a way for flourishing Banking Industry with a gamut of high-paying employment opportunities.
Let us analyze the banking sector in Dubai, now:
The Dubai Banking Industry: A Positive 2014 Outlook
- Research by the Moody’s
The industry experts are assured on the basis of their studies that the Banking Industry is on its way to prosperity at even a higher degree in the upcoming quarters of 2014. As per a report by globally recognized investors service corporation, Moody’s, commissioned in the last quarter of 2013, it is being reflected that 2014 is going to see a stable banking industry. The report owes the success of the industry to the improved operating environment and the flourishing real estate sector. It has been predicted by the experts that UAE will witness real GDP growth by 3.7% in 2014 owing to following reasons:
- Encouragement to the growth of private sector
- Signs of recovery in the diversified private as well as the legacy public sector
Apart from the GDP growth, these factors will also support credit growth of 7%-10% in the upcoming quarters of 2014.
- Foreign Banks Opening Branches in Dubai, UAE
There are numerous known global banks, such as MCB bank, State Bank of Pakistan, HBL, to name a few, who are opening their branches in the flourishing country of UAE. There are other banks that are eyeing Dubai for stationing their branches owing to an excellent fiscal scenario. These banks have a sole aim of meeting the banking requirement of global clients in UAE & other parts of the world and also interest in expanding their foreign bank network. Since, Dubai is recognized as one of the favorable destinations for trade and also for businessmen; therefore, it would be easier for businessmen to avail the facility to open letter of credit through these global banks. Hence, Dubai will gain popularity amongst expats and entrepreneurs from all over the world.
The positive outlook is also going to be advantageous for job seekers and professionals interested in grabbing a high-paying banking job in Dubai.
UAE Employment Market: Is It the Next Big Source of Bank Jobs?
Robert Half’s salary guide for 2014 clearly states that the Banking industry has started its journey towards a steady rise throughout Dubai and other major cities in the UAE like Abu Dhabi and Doha. There are global banks have decided and are currently realigning their business structures, with major focus on headcount investment into their most money-making product lines.
Apart from this, the fact that there are international banks who have already structured or are planning to station their branches in here, has already started creating ripples in the Dubai job market. The guide reveals a hard fact that UAE and its major cities are actually eyeing upon skilled expatriates from different parts of the world, especially Asian and European labor market.
Apart from the much known Real Estate and Construction domain, it’s the Banking sector that is on a high these days and is expected to incur in upturns in economy and job market of Dubai and the UAE as a whole in 2014.