UAE banks go after riskier clients in order to grow loans and credit cards
- Published on Sunday, 03 March 2013 06:46
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Stockbrokers are being inundated with inquiries from banks trying to sell them credit cards and loans as the recent rally in stocks bolsters confidence in the equities market.
It follows several years of some banks giving brokers a wide berth when selling their products, perceiving them as “high risk” during the global financial crisis.
“A guy like me would never get a call from a bank,” said Sherif Abu Noor, a broker at Global for Shares and Bonds. “We were normally blacklisted because our industry had a lot of turnover and there was a very high risk of being fired. From my own experience, I have recently received cold calls from Mashreqbank and First Gulf Bank for credit cards and personal loans.”
The calls are a recent phenomenon, occurring over the past two months, he said. The turnaround reflects a return of positive sentiment towards equities after an almost 20 per cent rally in the Dubai benchmark index since the start of the year. The Abu Dhabi index has advanced more than 15 per cent in the same period.
Read the full story from The National.
This trend is not limited to stockbrokers. Banks in the UAE across the board have become more aggressive in building up their credit card and personal loan business. Any slowdown in economic activity in the country will lead to a rising number of band debts. The current trend of chasing stockbrokers simply because of the rise in the local stock market could easily reverse. We covered related topics to this. Consider reading these: Saudi Arabia and the UAE handle bad debts differently, yet both come to the same wrong conclusion
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