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Promoting Best Practices in UAE Colin Fraser introduces this inaugural guide to best practices in treasury management in UAE, authored by Abu Dhabi Commercial Bank (ADCB) in association with Treasury Management International.

Promoting Best Practices in UAE

by Colin Fraser, Executive Vice President, Head of Wholesale Banking, Abu Dhabi Commercial Bank

Welcome to this inaugural Guide authored by Abu Dhabi Commercial Bank (ADCB) in association with Treasury Management International. In the articles that follow, we would like to introduce you to some of our senior management team, and provide a deeper understanding of the ways in which we support the evolving needs of our clients. UAE is a dynamic group of markets that have already experienced rapid change and expansion. ADCB plays a pivotal role in enabling this expansion, promoting best practices and competitiveness amongst our clients, and cementing UAE’s role as a financial hub for the region.

The birth of a new wholesale bank

Over the 22 years I have spent in banking so far, many of the proudest moments of my career have taken place since I joined ADCB. In 2008, while I was running Barclays’ corporate banking division for GCC, I was approached by ADCB to set up a new wholesale banking business. Since we first launched the business, throughout the crisis and beyond, we have been clear in articulating and delivering on our corporate strategy: ADCB is a universal bank for UAE, and we aim to continue developing market share across all customer segments.

For wholesale banking, this involves fulfilling the critical need amongst our institutional clients for high quality investment and transaction banking solutions, from small and medium-sized enterprises (SMEs) through to large multinational corporations, government entities and financial institutions. Innovation and customer service excellence are at the heart of what we do, enabling us to develop, deliver and support solutions that specifically meet client requirements.

Promoting client success, at home and overseas

This strategy has proved very successful, with strong, sustainable growth across all areas of our business. Cash management, part of our transaction banking business, is attracting a large number of SMEs in addition to our larger institutional clients, with consistently strong customer satisfaction metrics. We are also investing heavily in trade finance, facilitating our customers’ international trade ambitions.

We recognise that to support a client’s needs in international markets, it is essential to have a local presence. For example, given the enormous volume of flows between India and UAE, we established two branches in India. Indeed, such is the success of our IndiaLink initiative that it has become one of the fastest growing parts of our business. This includes supporting a number of large government-owned entities who work with ADCB as their banking partner for India. This has only been achievable as a result of the huge investment we have put into an efficient, secure and automated transaction platform, as Murali Subramanian, head of transaction services, describes.

Apart from exceptional circumstances, however, we satisfy the wider international needs of our corporate and institutional clients through our partnerships with Bank of America Merrill Lynch and Santander. We are also close to securing alliances with local banks in Africa and Asia to offer integrated global coverage with a comparable depth of solutions and services globally that our clients have come to expect locally.

ADCB has been a pioneer of highly successful, integrated banking partnerships. The global financial crisis demonstrated to many banks that they could no longer spread their activities across all parts of the world, and instead needed to focus on their core competences and target geographies, and form strategic alliances to offer solutions and coverage outside these areas. Consequently, while relationships between banks have often existed for many years, these have traditionally been primarily for correspondent banking partnerships rather than focused on providing integrated solutions for clients.

A robust regional partner

ADCB has transformed its business over the past five years. We have a diverse funding mix and strong capitalisation with 20% capital adequacy, resulting in a credit rating upgrade and robust credit default swap spreads. This has been the result of proactive efforts to strengthen our financial resilience and build sustainable, positive relationships with our clients. We are constantly reviewing and stress testing our business to ensure that we can continue to sustain our client obligations and fulfil our strategy. Our liabilities now reflect in real terms the transaction services we offer, and while we are active in wholesale financing, as the interview with Arul Kandasamy outlines, the bank is far less reliant on capital markets.

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