NBAD to add 900 jobs ahead of expected Dubai Expo 2020 boom
Dubai's successful bid to host the 2020 world fair is expected to provide wider economic benefits
National Bank of Abu Dhabi (NBAD) will take on more staff to grow its commercial business and tap the “enormous opportunities” created by Dubai's successful 2020 World Expo bid, its CEO said, even as it pursues international expansion.
The United Arab Emirates' (UAE) largest lender plans to add around 900 jobs to its current headcount of 6,500 next year across 18 countries, with a focus on new hubs in emerging markets as well as retail and commercial operations at home.
“Net target for next year will be an increase of 14 percent in headcount including direct retail sales, trade finance specialists and contractors,” Alex Thursby told Reuters in an interview at the bank's head office in Abu Dhabi.
“We believe we can grow here and overseas.” The bank shed 100 jobs during 2013.
Like many of its peers in the Gulf, NBAD - the largest lender by market value in the UAE - is looking to grow its international revenues to counter stiff competition at home, where 51 foreign and local lenders operate.
Taking charge on July 1, Thursby arrived at the bank having led Australia and New Zealand Banking Group's push into Asia and was expected to do the sameat NBAD, outlining in October a plan to expand its operations through aWest-East corridor stretching from west Africa to China.
“Fundamentally, we believe in the West-East corridor which is the Middle East, Asia and Africa. That economic integration and reliance is getting stronger and stronger, whether be it for oil, minerals, agricultural products, finished manufacturing products and flows of financial and strategic investments,” he said.
But Dubai's successful bid to host the 2020 world fair, confirmed two weeks ago, is expected to kick-start billions of dollars of infrastructure spending as well as provide wider economic benefits, something which changes the equation.
“Revenue coming from international markets right now is 20 percent and it will increase slowly. But there are events that can affect our strategy and targets and getting Expo changes the UAE a bit,” Thursby said.
“The Expo presents an enormous opportunity for trade finance, new people moving in, for mortgages, for credit cards, for deposits and account services. The investment and the flow of business internationally is going to appreciate greatly.”
Total spending related to the Expo, including private sector projects, could reach $18.3 billion, HSBC estimated in October, with a huge exhibition centre built on the 438-hectare Expo site, plus tens of thousands of new hotel rooms and an extension to Dubai's metro line expected to cost around 5 billion dirhams ($1.4 billion).
This is on top of a 13-percent increase in infrastructure spending outlined in Dubai's 2014 budget, which includes funds for a 2 billion dirhams canal development through its downtown area, expected to be completed by 2017.
Dubai's economy has been booming in recent months, fuelled by increased trade and tourism and recovering house prices - the 28.5 percent property price rise in the nine months to Sept. 30 was the highest in the world, estate agent Knight Frank said on Friday.
This, coupled with the step up in infrastructure spending and the expected boost from winning the 2020 world fair, has revived fears of another boom-and-bust cycle of the kind which brought it close to default four years ago.
The International Monetary Fund in July warned Dubai that it might need to intervene to cool its property market. Over-inflated Dubai real estate prices crashed by more than 50 percent in 2009 and 2010, triggering a corporate debt crisis which unsettled financial markets around the world.
“I don't have any concerns about overheating. Everyone in the world has realized that over-leverage can be dangerous. At this point in time, the footing of the UAE's economy and its capacity has grown since 2008,” Thursby said.
UAE banks were hit hard by the local property crash and sovereign debt problems, with high provisioning dragging down profits for a number of quarters.
NBAD, which narrowed quarterly net impairment charges by 18.5 percent to 299 million dirhams in the third quarter, will continue taking provisions in the coming quarter despite a recovery in the quality of assets and a more solid financial position of government-related entities, Thursby said.