The 10 Most Influential Banks In Dubai
About Banks and Banking Sector of Dubai
As a peaceful investment location in a bothersome neighbourhood, people usually refer to the Emirates as the Switzerland of the Middle East. This is mainly due to the simplicity and ease of banking in the U.A.E. Indeed, a growing number of ultra-high-net-worth people regard the nation as a safe haven. According to New World Wealth and The Wealth Report, more of the world’s wealthiest people may relocate their money to the country during the next decade.
Given the size of the population, many observers believe the onshore banking industry is overcrowded. The U.A.E. Banks Federation represents 52 local and foreign banks operating in the country, ensuring a robust financial sector. There are 22 national banks among them. The U.A.E. Central Bank controls new companies and the adoption of new technology and monitors all financial operations in the country.
The International Accounting Standard, the International Financial Reporting Standards, and, most recently, the capital adequacy rules in line with Basel III norms have been implemented by U.A.E. banks. Since 2011, all account holders in the U.A.E. have been required to have an IBAN to perform any local or international transactions.
Those banking in the U.A.E. has access to a variety of options. There are four types of banks in the nation, ranging from locally formed to foreign financial institutions:
- Commercial banks
- Merchant bank
- Industrial banks
- Islamic banks
Top 10 Banks in Dubai
The U.A.E. Central Bank is the country’s leading financial regulatory body. In the United Arab Emirates, there are 22 domestic and 30 international banks. The country’s banking business is dominated by larger banks, with the top five accounting for around 60% of the sector’s assets. In the U.A.E., Islamic banking consists of eight full-fledged Islamic banks and 23 Islamic windows opened up by conventional banks, accounting for 19% of total banking assets. Below is a list of the ten most influential banks established in Dubai.
- First Abu Dhabi Bank (F.A.B.) – The U.A.E.’s largest banking group by assets is First Abu Dhabi Bank (F.A.B.). It is based in Dubai and employs 5,451 people. Through its subsidiaries, F.A.B. offers a variety of banking products and services throughout the United Arab Emirates, Europe, the Americas, the Middle East, Africa, and the Asia Pacific. The firm is divided into two segments: Corporate and Investment Banking and Personal Banking Group. In December 2016, First Gulf Bank was purchased by F.A.B. The bank’s net income is expected to be AED 10.56 billion in 2020, with total assets expected to be AED 940.75 billion in 3/2021.
- Emirates NBD – Emirates NBD is the U.A.E.’s second-largest banking company in terms of assets. It has a 9,000-person workforce and is based in Dubai. In the U.A.E. and abroad, the bank presently operates 915 branches and 4,029 ATMs and S.D.M.s. Retail Banking and Wealth Management, Wholesale Banking, Islamic Banking (I.B.), International, and Information Technology and Operations are among the company’s primary segments. In 2020, the bank expected to earn AED 6.96 billion in net income, with total assets of AED 695.06 billion in 3/2021.
- Abu Dhabi Commercial Bank – Abu Dhabi Commercial Bank was established in 1985 and offers retail, commercial, Islamic banking, and other financial services. Consumer Banking, Treasury Banking, Wholesale Banking, Investments and Property Management are the bank’s four main segments. The bank is based in Abu Dhabi and employs 5,000 people. In the United Arab Emirates, it serves clients through a network of 72 locations and roughly 450 ATMs. In 2019, it merged with Union National Bank. This bank’s net income is expected to be AED 3.81 billion in 2020, with total assets anticipated to be AED 395.82 billion in 3/2021.
- First Gulf Bank – Founded in 1979, First Gulf Bank is based in Abu Dhabi. Wholesale Banking Group, Treasury and Global Markets, Consumer Banking, Real Estate, and Other Operations are the bank’s main segments. Kuwait, China, the United Kingdom, France, Malaysia, Bahrain, Sudan, Hong Kong, Switzerland, Lebanon, Labuan, Oman, Egypt, the United States, Jordan, Brazil, and India are among its 19 countries. The bank’s total assets in 2016 were US$66 billion, with a net profit of US$1.65 billion.
- Dubai Islamic Bank – Established in 1975, Dubai Islamic Bank is headquartered in Dubai. Consumer Banking, Corporate Banking, Real Estate Development, Treasury, and Other business sectors make up the bank’s operations. It is one of the significant Islamic Banks of Dubai and has 66 locations around the U.A.E. and services about two million clients. The bank’s net income is expected to be AED 3.29 billion in 2020, with total assets expected to be AED 291.71 billion in 2021.
- Mashreq Bank – Mashreq Bank is a bank based in Mashreq, Iraq. Mashreq Bank, headquartered in Dubai, was established in 1967, making it one of the U.A.E.’s oldest banks. The bank is a joint-stock corporation and an HSBC Group affiliated firm. Retail banking, commercial banking, investment banking, Islamic banking, brokerage services, and asset management are some of its services. In Egypt, Qatar, Kuwait, and Bahrain, the bank has about 45 domestic branches and 20 overseas branches. It presently has approximately 4,000 employees. The bank’s net income is AED -1.28 billion in 2020, and its total assets are AED 162.25 billion in three years (3/2021).
- Abu Dhabi Islamic Bank – Abu Dhabi Islamic Bank was founded in 1997 and is based in Abu Dhabi. Global Retail Banking, Global Wholesale Banking, Private Banking, Treasury, Real Estate, and Others are the company’s segments. Iraq, Qatar, and Sudan all have it. The bank’s net profit for 2020 is AED 1.60 billion, while its total assets are AED 130.69 billion (3/2021).
- Commercial Bank of Dubai – Founded in 1969, the Commercial Bank of Dubai is based in Dubai. Corporate banking, commercial banking, personal banking, Islamic banking, and support services are all available through the bank. It employs around 1,200 people. The bank’s net income in 2020 is AED 1.12 billion, while its total assets in 3/2021 are AED 102.47 billion.
- RAKBANK – RAKBANK was founded in 1976 and is based in Ras Al-Khaimah, United Arab Emirates. The National Bank of Ras Al Khaimah is another name for it (P.J.S.C.). Individuals and businesses in the U.A.E. can use the bank’s retail and commercial banking services. Retail banking, wholesale banking, commercial banking, Treasury, and insurance business are the five segments the company works. It oversees a network of 27 locations that serve about 700,000 consumers. The bank’s total assets are AED 52.8 billion, and its net income is AED 505.38 million (2020).
- Union National Bank – Union National Bank was founded in 1982 and provides investment and commercial banking services to salaried people, high net worth individuals, self-employed persons, and corporate organisations in the United Arab Emirates and other countries. The company’s headquarters are in Abu Dhabi. The Union National Bank operates out of 76 locations across the world. It is organised into four divisions: International, Treasury, Financial Institutions, and Investments. The bank has total assets of U.S. $ 28.2 billion and a net profit of U.S. $ 420 million as of June 2018.
Following the real estate crisis in Dubai in 2008-09, the U.A.E. banking industry is recovering. Banks’ financial performance, on the other hand, has improved significantly in recent years. The U.A.E. banks, particularly those in Dubai, are experiencing asset quality issues, as seen by their high share of non-performing loans and inadequate provisioning levels. On the other hand, Abu Dhabi-based banks appear to be less affected by these concerns due to their lesser exposure to real estate and more significant exposure to oil-based businesses, which performed well under the favourable oil price environment.
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The following are the main issues of U.A.E. banks:
- Loan and deposit concentration
- A large share of related party exposures,
- Restricted data transparency/availability, and
- Fierce industry rivalry.
Furthermore, the U.A.E. banks’ performance has been hampered by the still-recovering real estate and construction industries. Despite having a significant presence in its home markets, the banking sector has minimal diversity and is highly concentrated in regions, products, and customers. But, with the progress of time, the banking sector of Dubai has seen a subsequent shift, and the bars too have risen.