QR12bn to be earmarked for lending to high-potential GCC clients

Doha Bank will earmark QR12bn for lending to high-potential clients in Qatar, the UAE and Kuwait, Group CEO Dr Seetharaman said yesterday.

Both in the UAE and Kuwait, Doha Bank operates full scale branches.

For the UAE, the bank was committing QR1.5bn with focus on corporate and SME clients, Seetharaman said in Dubai yesterday.  SMEs in Dubai and Abu Dhabi will be supported by the bank’s fully licensed branches in these two emirates, he said.

Doha Bank is seeking to participate in the resurgence of the UAE, which is building its commercial economic platforms at a steady pace after the property market crash that impacted the UAE.

“Our outlook is based on the fact that the UAE is now firmly on a recovery trend, post financial crisis, and particularly after the consolidation of the property market. Indicators clearly show that general market confidence is slowly returning.

“Consumer confidence is showing positive trends and the UAE indicators on tourism, services, industry, projects and city infrastructure are returning to significant levels. People and institutions are benefiting from increased financial stability. Expatriates and investors are starting to look at the the UAE again as a key destination. All these factors combine to stimulate the core SME platform.

“In the first quarter of 2013, for example, the Dubai Department of Economic Development said there were some 26,577 commercial licence renewals and 4,032 new applications in the emirate alone.

With Abu Dhabi being one of the leading current destinations in the region for foreign investment, we expect new commercial licensing figures in Abu Dhabi to be along the same proportions against existing businesses. Based on trends in the UAE, a large proportion of these entities can be considered small or medium private businesses vying for market share in this highly competitive environment and seeking advanced partnerships with banks and groups of advisers.

“SMEs have only recently transitioned as a primary focus area for banks in the region and this has been mainly due to government stimulus and incentives for financial institutions to support this high-risk-high-rewards segment in many parts of the GCC.”

In the UAE, Doha Bank saw significant organic opportunities, without external stimulus involved in the SME market, which played a key role in the non-oil economy.

“And due to the strategic location of both Abu Dhabi and Dubai at the heart of this vibrant economic region, we envision growth across a number of sectors including industrial and semi-industrial or manufacturing businesses, infrastructure and construction businesses, consulting sectors and key commercial trade areas.”

Companies in these sectors are always looking to prove their competitiveness by leveraging economies of scale and know-how. This often requires investment in facilities and skill, coupled with key advisory and financial services covering day-to-day liquidity management, short- and medium-term financial solutions, project-based advisory and transaction structuring solutions.

Doha Bank has already established its SME banking platform in Qatar with a suite of services available to companies seeking to add financial stability and functionality to their operations. These services are also being offered both in the UAE and Kuwait.

Seetharaman said: “We are looking to participate in this sector, which has significant opportunities for GCC-based financial institutions. Both Abu Dhabi and Dubai are markets where we are seeking clientele that exemplify quality more than quantity. There are some major sectors such as property and projects development that are still very much underserved from a global advisory perspective, including risk advisory, green development standards and corporate liquidity solutions that are based on an ongoing partnership with the client and bringing together a team of expert consultants to meet their needs and mitigate a wide range of risks, as opposed to just a lending-based mandate.

“Doha Bank believes the future of banking particularly in these key sectors will depend on the ability to advise clients on sustainability factors and their ability to manage each project or company’s impact and usage of resources to support a greener economy. The brand allegiances generated by such responsible practices alone can boost overall business and brand value significantly.”