Leaning back to Lending

United Arab Emirates banks are nearing a new paradigm where a quality customer is king and a strong cash position is a necessary burden. The first few months of 2011 saw banks consolidate their liquidity positions and pursue new lending opportunities, especially within retail and small business banking, signaling a heat up in what many expect will be a fierce competition for winning the business and loyalty of a limited group of good-quality consumers. “I see ample liquidity in the banking system at present,” said Rick Crossman, head of personal financial services for UAE at HSBC. “What we are seeing is [a] potential increase in lending competition, with supply more available and chasing a relatively small number of borrowers,” confirmed Daniel Cowan, Middle East and North Africa banks analyst at Morgan Stanley. Supported by the early signs of a pickup in economic activity and by the UAE’s relative political stability,