UAE banks stay rooted in stability despite challenges

The banking system in the UAE was remarkably resilient in the face of multiple challenges throughout 2016 – be it low crude prices, contraction of government investment or unpredictable global political events. UAE banks continue to be well-capitalised and profitable, backed by high asset quality. The New Year, therefore, is unlikely to spring any unpleasant surprises as far as the banking sector goes.

Banks have been operating in an environment of slow growth. According to the International Monetary Fund (IMF) estimates, growth in the UAE is likely to slow down to 2.2 per cent in 2016, down from four per cent last year, with the oil sector slated to grow at 1.2 per cent and non-oil gross domestic product projected to do better by 2.7 per cent year on year.

In this scenario, the UAE banking system continued to perform reasonably well. It was able to offset reduction in government deposits by consolidating the retail banking sector. Significantly, until the third quarter of this year, domestic credit grew at 5.8 per cent year on year, mainly sustained by growth in private sector credit at 6.2 per cent and government assets at 4.6 per cent.

The ratio of non-performing loans increased only slightly from 6.3 per cent at the end of Q4 2015 to 6.4 per cent at the end of Q1 2016. Fortunately, this remains well below the peak level of seven per cent in Q4 2014.

UAE banks also boast an enviable capital adequacy ratio of 18.6 per cent by Q3 2016, far above the required 12 per cent.

Financial stability indicators also indicate stability; there was stronger growth in loans compared to deposits. The loan-to-deposit ratio was 103.4 in Q3 2016, against 100.9 up to Q4 2015, while the lending to stable resources ratio hit 88.2 per cent by Q3 2016, suggesting that banks have sufficient stable resources.

Rating agency S&P has noted that the UAE economy remains strong and diverse, where private sector debt is low and income levels high. The overall regulatory framework has improved over the past few years, but high credit risk continues to be an area of concern. The economic outlook, however, has been affected by volatility and weakness in the domestic equity and real estate markets, which is why banks are likely to be anchored at BBB- rating.

The impact of global events such as Brexit, hiking of benchmark interest rates by the US Federal Reserve, change of presidential guard in the US and regional conflict in the Middle East may throw its shadow well into 2017.

The eurozone remains shaky, what with nations struggling with trade disruption, refugee influx and the banking system weighed down by beleaguered Italian and Portuguese institutions. A negative interest rate policy will continue to dominate advanced economies, a decision that hurts them in the long run. International banks in the West also tend to remain preoccupied with implementation of Basel III and IFRS standards, often missing the larger picture.

In comparison, GCC countries and the UAE have fared better and are more focused in their subsidy targets. The government is following a policy of fiscal consolidation and if this continues, it will shore up momentum and GDP growth may hit 2.4 per cent in 2017. However, with about $80.5 billion debt maturing in 2016-18 (as per the IMF), both Dubai and Abu Dhabi face short-term rollover risks. This may put pressure on liquidity, leading to increased funding costs.

Two new laws will have a positive impact on banks and on the overall economy from the New Year. The New UAE Commercial Companies Law, introduced in July 2015, will slowly become more functional. This law is aimed at enhancing corporate governance, protection of shareholder rights and promoting social responsibility within companies.

Additionally, the new bankruptcy law, decreed in 2016, will also have wide ramifications for companies and banks. It will provide a comprehensive legal framework to prevent distressed companies from collapsing. Insolvent companies will be able to avoid liquidation through financial re-organisation, pre-emptive settlement or financial restructuring. This will come as a big support for the SME sector.

Thus, a combination of proactive regulations and state interventions will once again maintain stability within the UAE banking system and in the wider economy, enabling the country to maintain growth in a diversified manner.

Pijush Kanti Das

Senior lecturer at the Emirates Institute for Banking and Financial Studies

Careers Festival Day at EIBFS draws hundreds of UAE nationals

The Dubai campus of the Emirates Institute for Banking and Financial Studies (EIBFS), the chosen venue for the Careers Festival Day, drew an estimated 800 UAE nationals for various positions on offer by financial companies in the UAE. All UAE nationals who attended the two-day festival were successfully registered in the Ministry of Human Resources and Emiratization database.

Organized by the Ministry and the recently launched Government Accelerators, EIBFS supported the festival as a strategic partner. The Careers Festival saw the participation of 80 financial companies that included banks, insurance companies and money exchanges, and led to one of the largest turnouts of UAE nationals at a job fair. With hundreds of offers made at the Careers Festival, the deep commitment of the Government Accelerators and the Ministry along with EIBFS to hire 1,000 UAE nationals within 75 days in the banking and financial sector, seem well on the way to being fully realized.

His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, announced that Emiratization would be a key focus for Government Accelerators – a collaboration of public and private sectors and academia. The initiative, launched in November 2016, is the first of its kind in the world.

Speaking about the impressive turnout of UAE nationals and companies at the Careers Festival, Jamal Al Jassmi, General Manager, EIBFS, said: “As part of one of the most important links in the collaboration, EIBFS, representing academia, is pleased to have hosted this significant event at our Dubai Campus in our role as a strategic partner. Today, the financial sector is the second largest contributor in the country, in creating jobs for UAE nationals. As the leading institute for banking and financial training in the region, we will continue to build and leverage partnerships in public and private sectors, to ensure the provision of qualified teams, capable of driving growth in the sector as a whole.”

He added: “We also remain committed to offering the best training and rehabilitation programs in the banking and financial sector, in collaboration with our partners, including banks and insurance companies. Our goal is to help build a sustainable and resilient financial sector, which is capable of facing challenges that might arise on a global and regional level.”

Speaking on his part, Ahmed Jassim Zaabi, Head of Government Accelerators Team, said: “The financial sector continues to grow and play a significant role in supporting the development process of UAE nationals. By gathering all participating organizations from the sector under one roof, we are confident that the Careers Festival Day is the right way to achieve our Emiratization and development of human capital targets.”

He added: “Events such as this give citizens who want to work in this sector a chance. Each employee that has been successfully selected will have to attend a training program launched in cooperation with the Ministry of Human Resources and Emiratization, as well as the Emirates Institute for Banking and Financial Studies. Today the number of participating institutes in the Government Accelerator’s Emiratization objectives reaches more than 80 companies, spread over vital financial sectors such as banking, insurance and financial services integration.”

Speaking at the event, Suhaila Al Jasmi, Head of Training and Skills Development, The National Bank of Ras Al-Khaimah, stated: “Supporting the government’s Emiratization initiative is very important for us, and we recently reached an Emiratization rate of 38%. The bank’s participation in this festival has helped us to employ 20 talented nationals in various departments. However, we are dependent on training programs from institutions such as EIBFS, for our new employees, so that each employee can achieve the necessary expertise.”

Kathim Jawad, Head of Human Resources at the leading money exchange and remittance house Al Fardan Group, said: “Our presence at the Careers Festival Day expresses our support for the directives of his Highness Sheikh Mohammed bin Rashid Al Maktoum, around the challenge of Emiratization, which was announced by His Highness at the launch of the Government Accelerators. Al Fardan Group recently reached an Emiratization rate of 11%, and we currently have supervisory and managerial positions that are open to anyone who is capable. Through our participation in the festival we have already hired 17 people and we are ready to hire more.”

Juma Salem Al-Khatiri, Regional Director of Public Relations, Abu Dhabi National Takaful Company, said: “We are pleased to extend our support to projects and programs that support the government’s nationalization objectives in public and private companies. Our company’s Emiratization rate has reached 16%, and our management aspires to continue participating in similar events, to ensure that we continuously increase this percentage.”

At the end of the event, Jamal Al Jassmi mentioned that EIBFS would collaborate with the Governmental Accelerators, to assess the extent of the event’s success in achieving its objectives after the event, and would prepare a report and submit it to supreme authorities to study and further develop similar future initiatives.

An official delegation from the institute visited Malaysia. The visit supports the joint cooperative relations with the Malaysian educational institutions


EIBFS team met with the Deputy President Academic Prof. Datuk Dr. Syed Othman Alhabshi and President, CEO Daud Vicary Abdullah on November 1st, at INCEIF premises in Kuala Lumpur Malaysia. Discussions revolved around re visiting the MOU and potential partnership agreement through their PCIF offerings.

EIBFS team visited the IBFIM premises on 1st Nov. in their institute in KL. The team met with Mr. Badrul Hisham Abd Rahman, Head program development and partnership, M. Najib Shaharuddin, Chief learning Officer-H.O.D, Zanariah Zahari, Head Marketing & Business Development and Natejah Ahmad, Unit Manager.

The IBFIM team presented a briefing on its suite of programs, its operating model and strategic framework. The team suggested that both parties revisit the MOU to re work the deliverables.


EIBFS team visited the FAA offices on 2nd November in Kuala Lumpur to recognize their efforts in accrediting the Islamic Banking Diploma program and to discuss future plans of more EIBFS program accreditations. The objective of the visit was also to discuss the upcoming FAA compliance visit to EIBFS, exploring the opportunity to obtain accreditation for our BSc program and to gain some insight into FAA’s collaboration with BAC (British Accreditation Council) and its implication on existing and upcoming accreditations.

The team met with Mr. Prem Anand M Arjunan, Associate Director Accreditation, and Muhammad Zulhimi Bachok, Executive Compliance, Accreditation along with other team members.

Mr. Jamal Al Jassmi and the team welcomed the new CEO of Asian Institute of Chartered Bankers (formerly known as IBBM) in Kuala Lumpur, Mr. Prasad Padmanaban. Also present in the meetings were Kristine Anne Williams, head of Marketing & Communications and Mrs. Chireen Head of Research from AICB.

Discussions revolved around the new CEO’s next steps, the strategic vision of AICB going forward and the separation of their training function formation of Asian Banking School.


EIBFS visited the Asian Banking School in Kuala Lumpur to discuss collaboration opportunities in future. The team met with Mr. Huw Flynn Hughes, Director of Program Development and Quality Assurance and Ahmad Fairuz bin Mohd Adzahan Head, Program Development Division. Discussions revolved around ABS and AICB separation and what are the main responsibilities of ABS.

Representatives of Finance Accreditation Agency from Malaysia, a leading quality assurance and accreditation body supported by Bank Negara Malaysia, visited EIBFS Sharjah campus on November 8th 2016, for a compliance visit. The objective of the compliance visit was to review the progress of the accredited Islamic Banking Diploma program to ensure conformance to FAA Programme Accreditation (FPA) guidelines, requirements and specific conditions. EIBFS has been associated with FAA since 2014 when FAA granted the accreditation for the Islamic Banking Diploma Program.

Noor Bank to hire fresh Emirati graduates

Noor Bank, a leading Sharia compliant bank in the UAE, has signed an agreement with the Emirates Institute of Banking and Financial Studies, EIBFS, for the launch of its new Management Associate Programme, entitled ‘Imtiaz,’ meaning excellence, to hire talented Emirati graduates.

Hind Al Attar, Head of Human Resources at Noor Bank and Noura Abbas Ahmed, Director of the Training Department at EIBFS, signed the agreement at a ceremony held at the Grand Hyatt Hotel in Dubai.

Designed in collaboration with EIBFS, the programme is tailored specifically towards talented UAE nationals with the strategic objective of hiring fresh graduates and preparing them for leadership roles within the organisation.

The programme will nurture leadership and management capabilities, as well as provide an understanding of concepts within the banking industry. It will also enable the graduates to acquire knowledge and required proficiency for a future career within banking.

Under the programme, management associates will complete various training sessions for one-and-a-half months at EIBFS headquarters and will become Banking Operations Certified. Once completed, they will then be trained and allocated to a specific role within the bank.

Speaking about the initiative, Hussain Al Qemzi, CEO of Noor Bank, said, “Through the induction of ‘Imtiaz’, Noor Bank once again reiterates its commitment to supporting the development and mentorship of talented UAE nationals. Building human capital competencies is crucial to supporting the nation’s local talent and creating a culture that inspires innovation.

Jamal Al Jassmi, General Manager of EIBFS, said, “EIBFS is proud to collaborate with Noor Bank on a progressive course, exclusively designed to prepare gifted UAE nationals for a role within the bank. The implementation of this programme will provide trainees with the necessary expertise as well a comprehensive understanding of interdepartmental bank functions and operations.”

Since inception, Noor Bank has organised several internal and external workshops dedicated towards leadership development of Emirati talent. The bank has also participated in several career fairs as part of its goal to support the national workforce.

UAE’s innovation strategies are game changers

Dr Eugin Prakash Pathrose

The UAE has distinguished itself as one of the leading countries in the Gulf region. Its strive for innovation and creativity has enhanced its status, making it a primary destination to nurture talent and businesses.

The UAE has diversified into a knowledge-based economy under the pillars of research, science and technology. Its highly productive and competitive economy driven by entrepreneurs in a business-friendly environment has allowed private and public sectors to form efficient and effective partnerships.

His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, launched a National Innovation Strategy that aims to brand the UAE among the most innovative nations in the world in the next seven years. It is a primary tool to achieve Vision 2021 and an engine for growth across the nation.

Innovation is the key to promoting economic growth, increasing competitiveness and providing new job opportunities. The National Innovation Strategy focuses on stimulating innovation throughout the country. It aims to lead innovation in seven national sectors such as renewable and clean energy, transportation, technology, education, health, water and space.

The renewable energy strategy will create an innovative business unit to expedite distributed power generation projects such as small-, medium- and large-scale solar installations. This strategy will lead innovation in the renewables industry while also supporting applied research in clean technology.

As per a report published by the International Renewable Energy Agency, Irena and the Abu Dhabi Fund for Development (ADFD) have formally launched the fifth round of funding for renewable energy projects in developing countries. The funding round of approximately $50 million is part of the ADFD’s $350 million (Dh1.285 billion) commitment to offer concessional loans to renewable energy projects endorsed by Irena. This is a sign of turning strategy into reality.

The transportation strategy will enhance innovation in air and sea travel. The aim is to arrange and organise the new products and services to excel in a more effective manner and save time. The UAE government has a well-established road network. These roads are multilane motorways capable of coping with the high demand for road transportation in the country.

The education sector strategy will launch innovation labs in schools and universities to prepare students with targeted skills such as critical thinking, problem solving, creativity, perseverance and adaptability. The Ministry of Education has adopted ‘Education 2020’, a succession of five-year plans to introduce advanced education techniques, improve innovative skills and focus more on the self-learning abilities of students. As part of this programme, all forms of educational institutions, including schools, higher education institutions and international training institutions, will offer enhanced curriculum for mathematics and integrated science along with goal-oriented tutoring.

The health strategy will uphold innovative technologies in healthcare services. It will stimulate the growth of the biotechnology and pharmaceutical industries while also working with strategic partners to support medical research.

According to Alpen Capital, the UAE healthcare market is anticipated to reach $19.5 billion (Dh71.56 billion) by 2020, accomplishing an annual average growth of 12.7 per cent, marginally higher than the GCC growth average.

The water strategy will seek innovative projects to meet the challenge of water scarcity. According to Dewa, in the last six years, the emirate of Dubai has saved nearly six billion imperial gallons of drinking water through conservation campaigns.

Finally, the space strategies will use space technology for the purpose of study as well as for satellite communication, with specialised research on terrestrial applications. The UAE Space Agency is responsible for unifying, supervising and managing the nation’s space sector in addition to supporting its contribution to the national knowledge economy. After analysis, it is evident that the UAE has taken the initiative through the National Innovation Strategy to transform its vision into a reality.

The rise of women in the UAE financial sector

The GCC region has witnessed a substantial rise in the role of women in the banking and financial services sector. People I knew were surprised when I personally, as a health information management graduate, opted to pursue a career in business management. After joining Dubai International Financial Centre (DIFC) as a Quality Management Specialist, and then moving on to the position of Business Excellence Manager, I found myself drawn to the inner workings of the banking and financial services sphere.

What appealed to me the most, were the plentiful opportunities open to women of all backgrounds, and the challenging roles that enabled sustained growth and prosperity. Moreover, as a UAE national, I felt a strong calling to serve my country and make a meaningful contribution to growing the talent pool in this sector – particularly for Emirati women.

In my current role as director of training at the Emirates Institute for Banking and Financial Studies (EIBFS), it is rewarding to facilitate the growth of female trainees and employees within our sector. According to a recent study by Oxford Strategic Consulting, females are significantly more likely than males to want to work in the banking and financial services sector – a ratio of 29 per cent versus 11 per cent. Closer analysis suggests that the employment preferences of women in the UAE coincide with what the sector has to offer, most notably the female-friendly organisational culture and acceptance of female cultural values that are prevalent in this sphere.

In addition, women show a considerably higher tendency to opt for generous benefit packages (63 per cent versus 51 per cent) and opportunities for fast promotion (17 per cent versus nine per cent) than their male counterparts.

Governments in the GCC region have amplified their efforts to address the existing challenges faced by female entrepreneurs and have introduced a range of empowerment measures across the political, business, and educational arenas. These include market regulator improvements, lower entry levels and exit barriers, increased representation in chambers of commerce, and a greater focus on female literacy. In the last decade, the female literacy rate in the GCC region has been on a par with or above most developing nations across the world: nearly 100 per cent among 15- to 24-year-olds and almost 90 per cent among 25- to 64-year-old women.

From another viewpoint, improvement in social conditions, driven by changing demographics and patterns in gender diversity in the private sector, is a key factor motivating women to work. As a result, the GCC region has witnessed an increase in workforce participation of adult females over the age of 25 with a 6.8 per cent compound annual growth rate in the last decade.

Women in society have taken extraordinary measures to address the issues of balance between family obligations and work commitments. The Dubai Women’s Establishment has launched a variety of successful initiatives aimed at creating an environment where women have the opportunity to build their careers without compromising on their role as mothers. The Central Bank of the UAE has served as a strong facilitator encouraging greater participation of UAE nationals in the banking sector by allocating quotas for Emirati employees across banks in the country. More recently, the bank has moved beyond the quota system to a point-based system that aims to enhance the quality of jobs available to Emirati nationals, in order to allow them to grow within their organisations.

Banks across the country should accumulate a certain number of points based on the quality of positions given to UAE nationals – the higher the position, the more points the bank gets. Considering the UAE female population’s preference for challenging roles and job growth, the new system goes a long way towards attracting more women to the banking industry.

Given its fundamental role in the country’s drive to create a sustainable economic future and diversify its economy away from oil, banking is a strategic sector for the UAE. While oil-exporting countries continue to encounter significant challenges due to falling oil prices and global economic instability, our government has set the pace for national economic growth through its various initiatives aimed to enhance employment in the UAE.

With a wide variety of courses and training programmes on offer, EIBFS is ideally positioned to spearhead this effort. This year-to-date, the institute has delivered a total of 833 vocational training and educational programmes – more than half of which drew the participation of UAE nationals.

We must keep in mind that the banking and financial services sector fluctuates under the influence of unforeseeable economic issues. As thought leaders of our nation, we should prepare employees to tackle any present and future challenges that our country may face. For this reason, EIBFS constantly develops and updates its training portfolio to meet industry demands, including the introduction of courses addressing the issue of corporate restructuring.

‘Loyalty is the most fundamental value of being an Emirati’

As it globalizes, UAE will keep its marvelous traditions intact, said Eman Al Tenaiji, lecturer at Emirates Institute for Banking and Financial Studies.

Even as a young girl, Eman Al Tenaiji was wanting to take up banking as a profession. “I am proud to have been born into an educated family that emphasizes on learning and self-development. I developed a deep interest and admiration for the banking sector, particularly under the influence of my father who works in the UAE Central Bank. I acquired a bachelor degree in business from UAE University. My mother was also a significant influence on me, as I developed from her a love for learning and teaching through her career as a school teacher. Today, I am a lecturer at the Emirates Institute for Banking and Financial Studies (EIBFS) where I combine my passion for banking and teaching,” said Al Tenaiji.

She considers her university years to be the best years of her life. After graduation, she got the master’s degree in finance from Zayed University.

“One of the biggest challenges I endured was finding time to balance studying for my master’s degree while working at National Bank of Abu Dhabi. In my opinion, nowadays, women and men are equally recognized in all industries. Women have been proving themselves day by day by working alongside men towards the organisational goal. There are many examples of UAE women leaders who have proved that being a woman is not an obstacle to success,” said Al Tenaiji.

The Emirati identity, she said, is founded on the UAE culture that has been “embedded in us for generations. I believe the Emirati identity has always been present. The UAE has a rich culture and a strong heritage with Emirati values embedded in all Emirati households”.

“Emiratis have set milestones in a variety of sectors and are continuously looking for bigger and better opportunities for the UAE. I believe that female Emirati identity is not necessarily different; nowadays, women and men in UAE society are more or less equal. Following the union of the emirates in 1971, the Constitution granted equal rights for men and women.”

And no matter how globalized the UAE becomes, it will continue to keep its traditions intact, which is a reflection of the love of Emiratis for their country, said Al Tenaiji.

On the qualities that define Emiratis, she said, “I believe loyalty is the most fundamental value [of being an Emirati]. This country has given its citizens a plethora of opportunities and has done an impeccable job in developing economy and quality of life. Loyalty to our nation and leadership is extremely important to me, it is our job to give back to our nation by contributing to its success and by being upstanding citizens.”

Personally, the values that drive her and make the difference to what she does are ambition and appreciation. “I am a very ambitious person and am always looking for ways to develop and grow. I always ensure I am appreciative to those who have helped me become the person I am today,” she added.

Expressing her love for her country, Tenaiji said, “I am extremely proud of my country and its immaculate accomplishments in the past 50 years.”

The most prominent milestone of the UAE, she said, has been the union of the seven emirates. “It was the foundation of our country and that occasion set the pace of our growth as a nation. Under the leadership of (late) Shaikh Zayed Bin Sultan Al Nahayan, the UAE grew into one of the most prosperous nations in the world. Through the unification, we became stronger together.”