CBI chalks out huge expansion plans
DUBAI // Commercial Bank International (CBI), listed in Abu Dhabi, plans to double its branch network across the country within two years, as well as expand into other GCC and emerging markets next year. "We will determine in the next year or so about expansion in markets where we see development," said Douwe Oppedijk, the chief executive of CBI. "So far there are no concrete plans. But we always have an eye open for opportunities."
Mr Oppedijk said the "phenomenal growth" in the UAE banking market needed attention. CBI currently has a network of more than 10 branches in every emirate and will open up the same number in the next two years, beginning with Abu Dhabi, Dubai and Sharjah. "We have principle approvals for expansion and are currently in a feasibility stage," Mr Oppedijk said, adding that the new branch network would blend retail and corporate business branches to tap into smaller companies.
He would not say how much the bank was planning to invest in branch expansion, but added that offering a wider service base was part of CBI's overall strategy - set in motion two years ago - that includes raising capital, introducing a new product mix and expanding on client relationships. Corporate business accounts for more than 60 per cent of the bank's balance sheet and CBI has plans to further strengthen its core business.
Mr Oppedijk said the increase in the bank's capitalisation by Dh1.2 billion (US$340 million) via bonus shares in March this year was aimed at supporting its lending book and increasing the bank's solvency. "In peer comparison, we are the best capitalised bank," he said. "Direct exposure to subprime is relatively small if at all. But this [credit crunch] will determine the growth of economies in the West and here as well.
Mr Oppedijk said inflation was probably a bigger concern for the region than the effects of subprime. "Growth in the economy has fuelled inflation. But we need to be careful that it doesn't get out of the hand." He did not see de-pegging from the US dollar as a solution for imported inflation. "Countries at GCC level are being careful and testing the waters, but are wary of a move that will negatively affect the GCC block."
Published: August 4, 2008 04:00 AM