It may take a conventional bank a decade – or more in the UAE’s cut-throat market – to become a lender with Dh100 billion ($27.2 billion) balance sheet.
Wio Bank is halfway to that mark, less than three years after its launch, and the digital lender aims to double the size of its balance sheet in as many years.
“We are on track to get there, and I don't think we are too far away. The objective would be to get there in two to three years max,” Jayesh Patel told The National. “Actually, the balance sheet must be close to Dh60 billion, so the other Dh40 [billion] … you do the math. And if we grow just like we grew, it would be at least two years to get there.”
Seven UAE banks are currently in the Dh100 billion league. Although the UAE banking regulator has no set criteria to define a large banking institution, hitting the Dh100 billion mark in assets is regarded as an industry standard that separates bigger lenders from their smaller counterparts.
Wio is among the fastest growing banks in the country and is backed by Abu Dhabi’s sovereign fund ADQ, telecoms and technology company e&, UAE’s biggest lender by assets First Abu Dhabi Bank and investment company Alpha Dhabi.
But Mr Patel has set the sights higher. “If the bank maintains the kind of growth it has achieved in the past two years, it is not going to be long before, especially on the retail and SME [small and medium-sized enterprises] side, we are in the [UAE's] top five players, and that is our ambition,” he said. “We want to eventually get to top three.”
Current top-tier lenders FAB, Emirates NBD and Abu Dhabi Commercial Bank are huge in terms of their size, Mr Patel said.
However, in terms of second-tier lenders, “we are closing in very, very quickly … and the objective is to keep on moving up”, he added. “Customers have supported us, they have their confidence with us, and we are working every day to grow progressively into that space.”
Stellar growth
Wio, whose deposit base grew to Dh11 billion at the end of its first full year of operations in 2023, reported a threefold rise in assets to Dh37 billion at the end of the last year. In October, the bank announced it had passed the Dh50 billion in customer deposits.
The bank’s profit of Dh2 million at the end of 2023 ballooned to Dh400 million at the end of 2024, as its revenue base expanded to Dh800 million, from Dh266.4 million a year earlier. The lender last year added 140,000 retail customers and its business clients increased to 90,000.
Mr Patel is confident that Wio will be able to maintain the “stellar” growth for the next few years. “I think 2025, absolutely, we should see strong numbers,” he said. “I think we still have a few years of exponential growth.”
The industry is changing along with technology, and new opportunities will continue to drive growth, though the bank will have to “work a lot harder to keep it going”, he said. “I don't see growth tapering off, at least not for the next two to three years.”
If the UAE’s banking sector is growing about 6 per cent to 7 per cent in 2025, Wio should increase eight to 10 times the industry rate given the pace it has maintained so far, Mr Patel said.
In the pure-play digital banking space, where the lender competes with Zand Bank, Al Maryah Community Bank and Ruya Bank, Wio's balance sheet is “multiple times higher” than the competition, he added.
Wio is also trying to wrestle market share from digital banking units of conventional lenders such as Mashreq’s Neo, Abu Dhabi Commercial Bank’s Hayyak and Dubai Islamic Bank’s Rabbit. Conventional banks as well digital lenders in the UAE have maintained robust growth since the Arab world’s second-largest economy bounced back from the Covid-driven slowdown.
The UAE economy, which grew 3.9 per cent in the first quarter of this year, is set to expand 4.9 per cent in 2025, driven by a strong expansion in non-oil sectors as the country continues to diversify away from hydrocarbons.
The economy is projected to further expand by 5.3 per cent next year, the UAE Central Bank said in its Quarterly Economic Review released in September. The International Monetary Fund also expects the UAE's gross domestic product growth to outperform the global average this year and remain resilient to international uncertainty and headwinds.
Growing pie
The success of the digital lenders in the UAE and the level of disruption they have managed to achieve, according to Mr Patel, is in part attributable to traditional banks focusing more on providing “output that is a function of system processes”.
He said digital lenders focus on the customer need and say: "OK, my system, my process, my rules and I need to work now to address this need."
He added: “I think that's the big difference. It's not as much about technology as it is about mindset and the organisation structure."
That mindset, he said, is helping t, increase the overall size of the banking pie in the UAE. “We are not just fighting for a share. We are fighting to build the pie and make it bigger … I don't think it's an either-or situation.”
The size of the UAE banking market hit Dh4.6 trillion last year, according to UAE Central Bank data. The market share of digital banks will grow rapidly in the next few years, but it will eventually become incremental.
“I'll tell you why it's a harder thing to do, because the assumption is the conventional banks are just sitting. Well, they're not. They are converting to digital, and they are spending a lot of time and effort doing it.”
Who is winning?
More competition is better for customers, said Mr Patel, who, before joining Wio, led the launch of Emirates NBD’s digital banking unit Liv.
The rapid growth of the UAE economy, as well as the large expatriate population, are attracting global payments and lending platforms to an already crowded banking market.
UK-based FinTech firm Revolut, which in September received in-principle approval to launch services in the UAE, last month said it is preparing to start UAE operations as part of its global expansion push.
“Everyone realises the UAE and the region are phenomenal markets to do business,” Mr Patel said. More will come and “I don't think that is going to stop”, he added.
The rise in competition, however, does put pressure on margins, and lenders will have to find new ways to create value for customers. “Competition is great, but we have to serve the customer at the end of the day. I mean, there's no running away from that,” he said.
Regional expansion
Although less than three years in operations, Wio is open to inorganic growth opportunities, and it is mostly seeking options to acquire firms, including FinTechs, that complement its business model.
“I don't think we want to acquire portfolios [of other banks] as such. We want to acquire capabilities,” Mr Patel said.
The bank plans to launch a “tonne of products and services” and wants to acquire firms that could help it expand its offerings to retail and corporate clients.
“We have plenty of stuff we can do on trade finance … [and] there's opportunity to do better lending for SMEs [and] wealth is an incredibly important part of consumers' future,” he said. “For us, the play is more capabilities.”
Wio plans to remain focused on the UAE at least for a few years. “For now, we think we can do a lot more in the UAE. I think other markets will come in eventually, but more opportunistically,” he said.
However, if a great opportunity to expand crops up, “I don't think we would walk away completely from it”.
Wealth proposition
Wio, which initially focused on growing its SME and retail lending businesses, has also rapidly expanded its wealth management business. In less than two years of its launch, Wio Invest's assets under management crossed $1 billion.
About 45 per cent of customers who have a bank account with Wio have also opened a wealth relationship with the lender, which Mr Patel said is “fairly decent for the UAE market”.
“We'll continue to see this number grow. If the ratio of deposits to AUMs right now is about 6 per cent to 7 per cent, I don't see why it shouldn’t be north of 20 per cent, I don't see why that wouldn't be the case.”
Exchange traded funds, being more long-term structured investments, would probably be the largest share of that growth, he said. Cryptocurrency trading is another driver of growth as it is “incredibly popular”, and Wio Invest has recorded “large volumes of buy and sell on crypto”, he added.
The platform, which offers AI thematic investment options and robo advisory services, is trying to “inculcate a culture in our customers to save”, Mr Patel said. “The younger generation focuses on 'live today'. My view is live today, but don’t forget tomorrow, because tomorrow comes faster than you think.”
