DUBAI (Reuters) - Standard Chartered’s [STANB.UL] banking business in the United Arab Emirates is performing much better than last year, helped by growing consumer confidence, the bank’s head of retail clients in the UAE said on Thursday.
Banks operating in the oil-producing states of the Gulf Cooperation Council reported sluggish growth in 2016, with some recording lower profits and higher provisions on the back of a slowdown triggered by lower oil prices.
This year is “significantly better than last year”, Shehzad Hameed told reporters in Dubai. “In the double digits, off the back of mortgages, wealth management and the bank’s card business,” he added.
“Last year was a tough year, there was hardly any growth in terms of the performance of the business,” Hameed said.
The bank introduced a new mortgage product on Thursday to be offered by its conventional banking and Islamic banking business, hoping to take advantage of an improvement in the real estate market in the emirate of Dubai.
The total value of property transactions in Dubai jumped 45 percent year-on-year in the first quarter to $21 billion, according to the Dubai Land Department.
“The first quarter saw an uptick on volumes, both ours and transactions in the market, although margins are compressing,” Hameed said.
“We were getting feedback from our customers that they wanted greater flexibility using excess cash. Interest rates are expected to increase, so it ties in very well with our launch and enables us to compete with banks that are cutting rates.”
The U.S. Federal Reserve is expected to hold interest rates steady at its meeting this week but may hint it is on track for an increase in June.
The mortgage market in the UAE is worth about $30 billion, in which Standard Chartered holds a 6 percent market share, Hameed said.
Editing by Elaine Hardcastle