Experienced, Self-Driven & Results Orientated

Mr. Mohamed Amiri, Acting Chief Executive Officer of Ajman Bank

Interview with Mr. Mohamed Amiri, Acting Chief Executive Officer of Ajman Bank.
by Lawrence J. Ireton.

Lawrence J. Ireton: The UAE’s banking sector overtook Saudi Arabia’s three years ago, having the highest deposit and credit level in the region. The UAE currently holds 31% of total assets across the GCC, a total of $455billion and 28% of its capital. UAE banks are the biggest lenders in the region, with around $281billion of credit, nearly a third of the total GCC credit. Currently, despite slow retail banking performance, corporate banking seems to be back on the move. Please give us your comments on the current performance of the banking sector in the divisions you operate; retail, corporate & investment banking.

The 2011 upturn has been quite strong for banks in the UAE. The sector experienced a healthy revenue growth in 2011 and the first quarter of 2012. We have seen profits increase significantly in 2011 and reach the highest level since a record high in 2007, which testifies to the strength and resilience of the UAE economy and banking system.

In 2011, retail banking revenues showed a relative drop due to the socio-economic changes that we witnessed in the aftermath of the financial crisis, and which reflected on individual consumer and borrower behaviour, urging most to exercise more caution. On the other hand, the corporate segment witnessed a remarkable improvement in revenues and profits in 2011, driving growth in business volumes and increasing corporate banking profits.

I believe that the levels of growth for the banking sector in the near future will remain positive yet reasonable, due to the fact that the UAE Central Bank and regulatory bodies are becoming more cautious with regards to banks lending and risk management policies.

Lawrence J. Ireton: With around 54 banks operating in the country (both local and foreign), how would you describe the competitive environment of the sector?

There are great business opportunities for UAE banks, both within the local market and beyond. In order to truly make a difference, win market share, and keep competitive edge, banks will have to sharpen their offers and value propositions for different customer segments and to become more customer centric.

Ajman Bank has been particularly proactive when it comes to developing and increasing its market share. We have lately been nominated the ‘Fastest Growing Bank in the UAE’ for 2011 by the Banker Middle East – a nomination that we earned based on the quantitative analysis of 14 key measures such as assets, liabilities, total income, net attributable profit and return on assets, collating data on real size, real growth, and percentage growth to identify the region’s leading financial institutions.

Our increased volumes were mainly due to our special focus on providing a full range of Islamic banking products and a high level of customer service, which has driven our significant market share growth. Borrowers are selecting Ajman Bank in the most saturated of markets. We are always open for new business and we are still growing, providing access to Islamic financing to all those who want to enjoy a safer way to bank. We are proud of the fact that we are fair to customers by continuing to offer competitive profit rates and by remaining consistent.

Lawrence J. Ireton: As the first Shariah based Islamic bank incorporated in Ajman, please discuss to what extent you feel Islamic Banking will challenge conventional banking in the years to come (this region specifically)

Being an Islamic Bank has provided Ajman Bank one more reason to position for growth. Today, most of the world is moving towards Islamic banking. We are witnessing increasing industry efforts to transcend traditional business scope to gain market share. Islamic Banking is a growing phenomenon that came into existence to satisfy the financial needs of Muslims who have to observe the prohibition of interest-based transactions. Yet, it is now gaining more attention among Non-Muslims who have also been looking for less risky alternatives since the onset of the global credit crisis cast doubt on many Western risk management practices.

Lawrence J. Ireton: Could you tell me a bit more about Ajman Bank detailing current performance and future expansion aspirations?

Headquartered in Ajman and strongly supported by its government, Ajman Bank is the keystone of the emirate’s economic development strategy and is in a position to benefit from its growth and potential like no other.

Having been incorporated in 2009, the Bank has rapidly expanded its network and is currently operating with 12 branches with four branches opened lately in Ajman, Dubai, and Al Ain. The Bank doubled its ATM and CCDM network to reach 44 in total, both onsite and offsite. In order to further enhance customer interface and boost customer reach, the Bank applied state-of-the-art technologies to improve its alternate communication channels efficiency, providing customers the facility to access the Bank services from a wide range of both conventional and modern channels. This has contributed to a remarkable growth of the Bank’s customer base and was reflected in the overall Bank performance for the year.

Actually, Ajman Bank has been able to record 75% increase in net profit end of 2011 and a breakthrough performance for the first quarter of the current year with a 154% increase in net profit recorded by the end of March 2012, compared to the same period in 2011. Despite challenging market conditions, the Bank did not have to weather the impact of NPLs and remained well on track to achieve business growth and expand its customer base. We are beginning to see increased business momentum with a remarkable growth in our assets as well as our deposit liabilities, which is very important. Our lending portfolio has also shown remarkable growth and while we still may not be quite near where we want to be, we certainly are in the right direction.

Offering a full range of Islamic Financial products and services, Ajman Bank raised the bar in 2011 with creative offerings, launching its ‘Mahra’ Ladies Banking services and a pioneering Customer Loyalty Programme, ‘ROADMILES’ – the road counterpart to airmiles programmes, with Credit Card spending being here redeemed for fuel. Early this year, the Bank launched its Pledge product with National Bonds, in an endeavor to seek create innovative Personal Financial solutions for the Bank customers.

Ajman Bank has a well-recognized market presence with a strong product portfolio. Our customer satisfaction scores and deposit growth show that our approach is resonating with customers. Gearing up for the future, we have the key success factors necessary to withstand any market changes.

Lawrence J. Ireton: What are your views on the UAE Investment Map project and what benefits do you believe this could bring for Ajman Bank?

This a great initiative that is expected to promote the sustainable and balanced development of the UAE and contribute to the country’s growth by attracting investment and diversifying revenue streams. This ambitious programme will certainly provide excellent investment opportunities for the Emirate of Ajman and Ajman Bank.