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CASHING IN? Retail boom not a bonanza for UAE banks
For retail bankers in the UAE, extracting value from the latest consumer boom is not as easy as it might seem at first glance; after all lessons from past excesses has made both borrowers and the central bank - more cautious towards debt.
June 15, 2012 6:01 by Reuters
THE MATURING CUSTOMER
Shopping has always been at the heart of life for Dubai’s expatriate community, given the heady cocktail of tax-free salaries, the presence of a large number of outlets to spend that cash and the fact it’s too hot to do anything outside for at least three months of the year.
The number of shoppers has also been swelled in the last 18 months by tourists flocking to the emirate, a perceived safe-haven in a region rocked by the events of the Arab Spring.
Therefore, it is no surprise that the retail sector in the UAE is booming.
“From the aggregate average of feedback from clients in the sector, I would say most retailers are growing at a rate of at least 15 percent,” Nick Levitt, head of commercial banking UAE at HSBC, said.
This is reflected in boosted credit card spending, with the average amount spent per transaction up 15-20 percent year-on-year in the first quarter, according to Farhad Irani, head of retail banking at Mashreq – the figure is as much as 25-30 percent higher for foreign cardholders, he added.
And this isn’t from a low base either.
“The spends here are much higher than the averages worldwide, with the average about 500 dirhams ($140) per ticket. In Asia, the average ticket is $22-23,” Irani said.