Professional Documents
Culture Documents
Bank
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Emirates NBD is a bank which came into being on 16 October 2007 after the merger of
Emirates Bank International and National Bank of Dubai. Since, the two banks were
among the top four banks of the region; their merger made them the leading banking
group with the largest asset base. It is the fastest growing bank in UAE with over 132
branches and 705 ATMs complying with its vision of being the most dynamic and
leading financial service provider in the region. Apart from this, the bank delivers solid
investments with equal emphasis on the brokerage and asset management services. It is
well ahead of its competitors being a leader in retail and corporate banking sphere. It
offers banking in many areas such as personal, private, priority, corporate and business.
The bank believes in expanding by mergers and acquisitions. It has shown interest in the
recent past to acquire any inconsistent rival to expand beyond Middle East. Emirate
NBD asset management has an impeccable reputation to analyse the investment
potential of a region. It has raised funds better than the local and international
companies working alongside revealing its strong human capital. Also the sound
liquidity management has raised deposits leading to greater revenue. The bank is driven
by optimisation of balance sheet, investment and profitability making it the region's
trading, financial and economic hub. The bank consists of 12 Board of Directors who are
industry leaders in their respective fields and meet monthly to discuss the strategies,
control and risk management policies to be implemented by the top management team.
The management team comply with the decisions made by the Board of Directors. The
bank has been progressive in its approach to establish itself as the leading bank in the
Middle East. The financial statistics of 2009 showed that the bank has total assets of
about AED 281.6 billion with total income of AED 108 billion, 20% cash dividends,
customer loan at AED 214 billion and deposits at AED 181 billion. Though 2010 proved
to be a challenging year as the revenue declined by 5% in the corporate sector and 2% in
the consumer sector due to bad loans amidst slower global recovery from recession,
Emirates NBD seems optimistic to avail the growing opportunities in the market. The
brand value is stronger as the organisation is represents unity as its growth icon. The
Target Markets
The greater assets have been advantageous to the banking sector and bank has been
growing at a greater pace. This has opened a lot of opportunities with a greater number
of services and a larger customer base. The organisation aspires to gain over the markets
given below:
Consumer and Wealth Management
Wholesale Banking
Global Markets and Treasury
Network International
IT and Operations
Investment Banking
Outlook
Geographic
Emirates NBD Bank has established itself as a global entity and has been extremely
blessed at arranging debt capital market transactions globally. This has shown that
Emirates NBD Bank's position in the global arena is increasing over the years
complementing its astounding success in the Middle East. It has a growing interest to
expand over the Indian subcontinent and China. It has also expressed interests in taking
over smaller banks to expand its empire in globally.
Recently, Emirates NBD Bank in connection with HDFC, an Indian Bank launched an
online remittance facility for its Indian customers. This would allow the expatriate
Indian community in the Middle East to reemit its funds to their HDFC account.
According to the bank, the Indians form the largest of the demographic base in the
Middle East and hence have been advantageous even during recession which made the
region the largest remittance earner with money valued at $55 billion in 2009.
Thus, the Emirates NBD Bank is smart enough to understand that the its operations are
highly valued in Middle East but to expand globally it needs to collaborate and merge
with the regional banks to expand its customer base.
The ownership statistics are also affected geographically to some extent. There are over
1500 shareholders of which the maximum numbers of shares are held by the Investment
Corporation of Dubai. The foreign ownership is restricted to a mere 5 % of the original
of which about 3.8% is occupied and rest is under the nationals. (Shareholder's
Resources)
Demographics
The banking facility is available to all people and does not distinctly identify people on
the basis of age, gender, education, nationality and family size. However, certain factors
such as income and nationality may affect the strategic implications of the policies on
the customers. The income of a person drives the benefits availed by a person i.e., larger
and frequent transactions by a customer are preferred over the other customers when
the interests of the customers are considered. A person capable of earning by himself is
considered for credit cards. A minor can only form an account with the bank in presence
of some elder. The benefits availed by the customers also depend upon the type of
account, credit card owned by the customer and loyalty is considered a true virtue and
always respected.
Behavioural
The involvement of the banking system in everyday life of people in any nation is
immense. Mostly all the transactions involved in any customer's activities are dealt by
the banking system a person is involved in. Thus, the banking system is independent of
the behaviour of the customer as whether the customer lives an active lifestyle or a
passive one, the need of bank would be inevitable. It however, would affect the
frequency in the transactions that a customer is used to and hence would differ with
respect to the benefits or products that the bank provides to its customers and
shareholders.
Brand Architecture
As discussed earlier, the brand architecture of the Emirates NBD bank consists of the
Masterbrand which is further divided into:
Retail
Personal Banking
It is the most basic form of personal banking where the customers are complimented by
general insurance plans, protection and health plans.
Priority Banking
Here the customer is given outstanding value for the money, along with dedicated
relationship manager, exclusive hospitality and priority services. The customers also
avail promotional offers and preferential pricing. They are also given priority in the
usual banking transactions.
Specialist
Corporate Banking
This sort of banking is not personal and meant for large corporate houses and
industries. The cash and liability management services by the bank help the corporate
clients in meeting their objectives.
Investment Banking
The investment banks are not concerned with deposits and invest the cash in the
government and corporate offices to attend to the security issues. The clients are offered
with the shareholder services such as analyst coverage, dividend history, and share
tools.
Business Banking
It is very similar to the corporate banking however it is concerned with the small and
medium business industries. The benefits are less as compared to the corporate banking
which includes cash management and trade services.
Exclusive
Private Banking
Such a banking facility is only for valued clients which helps the customer through the
sustained financial services. The customers are showered by the global wealth
management expertise and liable to the Shari'a compliant fund and banking solutions.
The benefits of the above banking vary considerably from the retail to specialist to
exclusive where the exclusive customer receives maximum benefits and the retail
customer receives the minimum. (Emirates NBD, 2009)
Remittances facility
This was done to support the overseas Indian clients to transfer amount from their
Emirate NBD account from Middle East to the HDFC account in India. This online
remittance facility given to the Indians generated excellent exchange revenues.
(Emirates NBD, HDFC launch e-remittance facility )
Overdraft Facility
The temporary cash shortfalls of a customer was a problem which was shadowed by the
bank by introducing an overdraft facility which ensured to solve the emergency cash
requirements of a customer and hence would be able to solve the bouncing of cheques.
However, every customer would have to sign a contract with the bank to avail the
facility. The maximum amount permitted would depend on the salary of the customer.
Such an step was beneficial to the bank as well as the customer as it solved instant
money shortage problems. (Emirates offers customer protection)
The market for the banking sector is vast but the risk associated with the banking sector
is huge. Banking in UAE in general is moving forward. The reason being
Foreign investment and bigger players such as investors from Europe and America have
become active participants who are generally associated with larger, complex deals and
transactions. The banks in the Middle East are progressing to the next level because the
deals are regional and it is more suitable for the regional bankers as they are more
familiar with regional market structure.
The banking has become more sophisticated, transparent and advantageous.
Fall backs in the corporate governance are reducing.
Financial industry in the Middle East is improving but is still not at par with the global
standards.
The oil money gorge prevalent from many years seems to have been sort out.
The above changes are very well reflected in the strategies and policies of the Emirates
NBD Bank.
Corporate Governance
The bank identifies that corporate governance is vital for the development of the
banking sector and also to avail benefits to its stakeholders. Of the several benefits of
corporate governance, the bank pays importance to risk management and modifying
stagnant policies required to gain strategic advantage. The major policies followed by
the organisation are:
The policies followed comply with the international standards.
The policies are effective in controlling risk management, information disclosure, thus
are accountable and transparent.
The internal structure is well versed and relationship among the board members and the
management team is friendly. The same goes for the external structure where the bank
is highly cooperative towards its stakeholders and regulatory bodies.
The bank complies to the Basel II and with International Anti Money Laundering Laws.
(Corporate Governance)
The investment banking sector in the Emirates NBD offers huge opportunities to the
customers. The recently opened private banking centre in Abu Dhabi has been a huge
establishment for the bank as it would attract a number of wealthy global investors.
Thus this would connect Middle East to the Europe and America. (Emirates NBD
Private Bank)
The structure is well sorted with the branding done after its latest merger. Each of the
products provided by the organisation is valued as single brand and hence they are
independent of the other products. This helps the bank to focus on each brand
separately and keep it up to date. This has brought about
Restructuring
Simplicity
Flexibility
Usability
The internet penetration in the Middle East has been driving the IT services in the
market. The growth in the Banking sector was fired up by the increase of internet usage.
Also, it gave way to yet another aspect of banking called the mobile banking and internet
banking. This has further revolutionised the banking sector. (Emirates Bank NBD Dubai
UAE)
(Regional Focus)
2.2 SWOT Analysis
The SWOT analyses the strengths and weaknesses of the Emirates NBD Bank and
implies prospective opportunities and threats.
2.2.1 Strengths
The company is the leading bank in terms of assets in the GCC nations. Thus, being a
leading bank gives you wide opportunities to participate in the development of the
region and strengthen the financial position of self.
The Banking in the Middle East is driven by the economic growth as a result of
increased oil prices. This has brought a lot of money into the hands of the customers.
The banking is customer driven; hence the market is quite liquid.
The rebranding of the Emirates NBD has been a success, hence the brand architecture of
the bank adds to its advantage as it is flexible and enhances usability. Also the
consideration of the brands as single entity adds to its simplicity and thus, uniforms the
entire structure.
The bank has realised that demographics is a key factor affecting the growth of the
banking sector to global spectrum. The steps such as launching remittance with an
Indian Bank to facilitate the Indian living overseas, opening a private banking and
business banking centre in Abu Dhabi to develop the city and bring in huge foreign
investments was of strategic importance for the organisation as well as the region. Such
decisions by the top management and board of Directors is blooming the banking sector
in Middle East.
The organisation is a leader in the global markets with larger assets. The foreign
investments from Europe and America have also brought in advanced technological
changes and improvement in the IT services. This has led to the development of the
organisation on technological front.
The organisation practices and adheres strongly to the Corporate Governance policies.
The Corporate Governance is quite an asset to the development of an organisation as it
is among the major flaws in the banking sector in the region. The banks in the Middle
East have been unable to cope with the dearth in realisation of Corporate Governance.
The internal structure of the organisation is quite friendly where the Board of Governors
are in perfect sync with the management team of the organisation. The external
structure also is quite robust and delivers its shareholders with interests at par with
their expectations. Such a structure is key to its architectural design and branding.
2.2.2 Weaknesses
The banking sector in Middle East is highly fragmented with over 46 institutions,
comprising of 21 National banks and remaining 25 being the Foreign banks serving a
mere population of 4.4 million. Since, Emirates NBD is one among these banks; it is
highly likely that the competition would be stiff.
The majority of the banks in Middle East are funded by customers. The customers or
clients or shareholders are driving the banking sector. The banking sector believes that
every customer is of value to the bank and hence, in cases of bad loans or money
shortage where the loans are quite high compared to the deposits, the bank is likely to
face a meltdown. Such a high exposure to mortgages on housing does not bother the
bank now because of its higher economic growth but in times of softening, the real
estate could prove dangerous to the banks.
The increasing global influence on the regional banking could prove rendering. The
recent meltdown did not affect the banks in the Middle East as they posted profits
amidst the global recession because the money in the Dubai Financial Markets is limited
to the global exposure but with higher exposure and increasing global investment in the
Middle East, the global meltdown could hit the banking sector hard next time.
The majority of the workers in the Middle East are the expatriates, hence the bank needs
to take into consideration the demographics and study their effect on the markets in
more depth. The initiation in this regard has been shown by collaborating with HDFC
but it is limited and needs to expand to all sections of expatriate community. (Merger
increases pressure)
2.2.3 Opportunities
The bank has divided its brand to the three categories: retail, specialist and executive.
Such a categorization has helped the bank in making sound decision and focus on each
of the above independently. The opportunities in the retail sector are as the bank
continues with its strategy of merger s and acquisitions. The corporate sector is quite
fruitful as well with the establishment of the Business Centre in Abu Dhabi. This has
opened gates for the regional companies and small business houses to bloom by
borrowing loans and mortgaging. The foreign investors are also attracted as they are
likely to avail the benefits of the executive brand of the bank.
With the increasing competitive market it is easy to diversify and concentrate on core
banking areas to generate higher revenues. The act of mergers and acquisitions is an
inevitable story and more are likely as the company expands over the years.
The increasing foreign trade and investment has opened doors for economic
development and gaining exposure to the IT services. The technological front is an area
to improve upon and imbibes in itself countless opportunities to spur the economic
growth further.
The identification of the needs of expatriates in addition to the locals would increase a
global presence of the bank. Since, the bank is in line with the global treaties and is
directed by the International Standards, the opportunities are limitless. The expansion
provides with opportunities to gain experience, train employees, and build a rich human
capital.
2.2.4 Threats
The stiff competition from the regional banks has been a cause of distress for the bank.
With the increasing fragmentation, the shares or revenue generated are at stake. The
recent merger of the bank and rebranding itself has forced many of the competitors such
as Commercial Bank of Qatar to buy stakes in Sharjah's United Arab Bank and National
Bank of Kuwait hence dominating the Turkish Banking sector. This has increased the
competition further.
The locals in the region are not well versed with the technological advancements, hence
are incapable of working in the banks where newer technology is entertained. This has
forced the organisations to hire expatriates which do not seem to support emiratisation.
This is not of national interest.
The security of the banks has become a cause of worry for the regional banks. The recent
upsurge in the technological advancements such as increased establishments of ATM's
could cause frauds and attacks on the ATM's. This is a threat to the safety of the
customer's money and bank's astounding prestige.
The cost of funding in the banks is rising at a stepper rate.
The greater number of credit card could point to the same problem of bad loans. The
various brands of the organisation offer abundant credit cards to its customers which
could leave the bank rendering.
2.3 Competition
The banking sector in UAE came to being in 1980 and the money from the oils gave way
to the sudden development of various banks. There are about 46 financial institutions in
the region, of which 21 are National and 25 are Private. The Emirate NBD is a private
bank and faces stiff competition from a whopping 45 banks in such a small region which
serves just the 4 million people. The mergers and acquisitions by the bank have paved
off as it now owns 19.2 per cent of the total assets making it the leader in the banking
sector. It also enjoys 22 per cent of all loans and 18 per cent of all deposits which is quite
an accomplishment. By considering the stature it is well ahead of its rivals but still faces
competition from these regional banks as it aspires to expand globally. The trend of
mergers has been propelled in the rest of Dubai where Banks namely, Commercial Bank
of Qatar is buying stakes to increase its percentage of assets. This would distribute the
interests of the foreign investors towards the banks and hence, the dividends and profits
may go low.
There are a number of products offered by the bank depending upon their involvement
in a brand i.e., the products vary greatly depending upon the customer's involvement in
personal, private, priority, business or corporate banking.
Credit cards include
Dnata Platinum Credit Card (travel benefits), Skywards Infinite Credit Card, Infinite
Credit Card, Platinum Credit Card, Business Credit Card, Gold HYPERLINK "../../My
Web Sites/marketing
strategy/www.emiratesnbd.com/personalBanking/cards/creditCards/silverAndGoldCre
ditCards/index.html"&HYPERLINK "../../My Web Sites/marketing
strategy/www.emiratesnbd.com/personalBanking/cards/creditCards/silverAndGoldCre
ditCards/index.html" Silver Credit Card,
Debit cards offer better shopping and make day to day purchasing easier by making
billing more secure and upfront by its set of cards such as Visa, Visa Platinum, and Visa
Infinite etc.
The investments include International wealth Account and Savings Programme.
Personal loans and auto loans can be easily taken.
Internet banking and mobile banking are yet another easy way to transact money from
one account to other.
Several packages can also be availed which offer the best possible services and other
offering in a single package to suit to your needs to the fullest.
The also offers financial planning and wealth management solutions to its esteemed
customers and helps them make fruitful decisions regarding investments.
A financial investor is eligible for private banking which is reserved for a very few of the
clients.
The bank offers many more products such as educational assistance, greater investment
plans etc. It has also formed an "Emirates NBD Foundation" to help assist to its cause of
Social Corporate Responsibility.
3.1 Mission
The sole mission of the Emirates NBD is to gain global recognition as the leading and
most dynamic financial service provider in the Middle East. It also aims at
implementing IT services to complement the banking experience of its customers.
(Emirates NBD, 2009)
The group aims to increase its capital by expansion and acquiring under-penetrated
areas.
The growth of Emirates Islamic Bank could be facilitated by acquiring preferred
geographies.
The bank also aspires to increase its deposits by laying emphasis on funding.
It also is determined in offering services to benefit its stakeholders and wide customer
base.
The risk strategy quantitatively measures the risk associated with an operation hence
controls, manages and monitors the risk portfolio of the organisation. (Emirates NBD,
2010)
Network International also recorded growth as it quickened the growth of credit card
diligence.
The company has been operating on newer IT services which have provided several
resources to secure their customers.
3.5 Positioning
The Emirates NBD is positioned at the top of the chart in terms of assets and enjoys
extensive opportunities to grow in wide array of features. The company has been
improving on its security issues by implementing advanced IT services. The internal
relations among the employees are cordial and bank offers its customers with services
that are at par with their expectations. The top management and Board of Directors
work in unison to make it possible.
3.6 Strategies
The objective of the company is to establish itself as the leading bank in the retail and
corporate sector. This could be done by
Increasing the deposits by lowering the loan scheme
The funding process should be reviewed and implemented to retain liability.
The interests of the customer should be of paramount importance
Expansion could serve as the perfect solution to unveil opportunities
Risk management would ensure control and corporate governance (Emirates NBD,
2009)
Product
There are several products from credit cards to debit cards and investments. A product
must also be differentiated from other competitors. Here, the product is categorized into
several brands where the brand value increases with customer loyalty and financial
investments. Wealth Management and financial service solutions are other offerings and
benefits.
Pricing
The pricing is generally the amount paid to the bank for maintenance and security of the
customer's account. Interest is also charged on loans.
Customer Services
The benefits to the customer and remaining at par with the customer expectations are
the ways of customer care.
4.0 Financials
The financials of the organisation would be examined by sales and expense forecast to
see whether the results comply with the marketing strategy pursued by the bank.
170,096
(136,360)
Other operating income
1,300,156
502,935
Share of (loss)/profit of associates and joint ventures
(161,069)
338,575
Earnings per share
0.60
0.66
Interest expense
5,205,173
5,746,922
Distribution to depositors and stockholders
707.039
755,436
Fee and commission expense
628,230
751,280
General and Administrative expense
3614,804
3,355,602
Earnings per share
0.60
0.66
A report compromising of the quarterly and yearly expenses incurred by the bank
To introspect the customer satisfaction
To administer new product development
Interview
An interview with an official of the bank was important to gather information on the
company's marketing policies and strategies.
The bank has been performing great and above expectation in spite of the recession
hitting the global arena. How has the company managed to withstand these areas?
The company follows a dynamic business model with a coordinated human capital
which helps them to adapt to changing enterprise environment. Ours is a leading bank
in the region and since the Dubai Financial Market remained steady in the amidst
recession and blooming oil prices, the recession did not pose much of a threat to our
increasing customer base. We relied on giving lesser loans and dropping the loans by 5%
to increase deposits which were a success as the bank saw an increase of 10% in deposits
from last year in 2009.
How would you illustrate the increasing competition in Middle East among the Banks?
The competition has been rough as many of the banks have started with our policy and
strategy of merger and acquisition. After our bank rebranded our products and formed
the largest bank in terms of assets many of the banks such as the Commercial Bank of
Qatar began the same operations of mergers to gain greater customer base and diversify
their capital. This has prompted us to take bigger steps such as setting up a Private Bank
for our loyal customers in Abu Dhabi and follow newer set of Corporate Governance
rules to keep ahead.
You have set up a Private Bank and a Business Bank in Abu Dhabi. What's going on with
that?
Well, the plan is pretty clear as it is. We want to provide our valued customers with
financial and wealth management solutions. The development of Abu Dhabi is a rich
prospectus as it would be our passage to the outer world to increase the global
participation. With global reach we would see larger investors in terms of number and
quality.