Douglas Blakey talks to Nabeel
Malik, marketing director of retail banking at Dubai-based Mashreq,
about the bank’s branding strategy at a time when the United Arab
Emirates market is consolidating and becoming more competitive.
Mashreq posted record interim results on the back of a strong local
market
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Since its formation as Bank of Oman in 1967, Mashreqbank – it
changed its name in 1991 – has grown to become the largest
privately owned bank in the United Arab Emirates (UAE). In
particular, it has played a pioneering role in retail banking in
the region: it introduced the first ATMs in the UAE and was the
first bank in the country to launch credit cards. It now boasts the
largest retail customer base in the UAE, according to Nabeel Malik,
marketing director of retail banking at the bank, who says that one
in two families have some form of relationship with the bank.
At a time when the UAE retail banking sector is adapting to
increased domestic and international competition and heightened
M&A activity, Mashreq has begun to up its game. The group
dropped the word ‘bank’ from its name in May this year as part of a
major rebranding exercise, and has begun to expand its product
portfolio and target the Islamic life insurance and mortgage
markets in the region.
On 1 August, Mashreq reported net profits for the first half of the
year of AED956 million ($260.3 million), a rise of 45 percent
compared with the same period last year. According to the bank, the
growth in profits stemmed from a major increase in total assets, up
by 50.3 percent to a record AED70.6 billion, with customer deposits
rising by 58 percent to AED44.9 billion. Commissions and other
income rose by 81 percent to AED482.4 million, in part as a result
of a surge in credit card business.
Talking to RBI, Malik says that the bank is well placed to
compete with the increasing number of foreign banks entering the
market, a group that now controls one-quarter of UAE banking
assets. The UK’s third-largest bank, Barclays, entered the UAE in
March, announcing plans for two branches, three service centres and
an ATM network by the end of the year (Mashreq has, in contrast, 47
branches and 162 ATMs). A GE joint venture with the industrial
conglomerate Al Futtaim group also represents additional
competition for long-established players such as Mashreq.
Malik said Mashreq will also look to compete head-on with the new
regional super group, Emirates Bank NBD (see RBI 575). In
March, Emirates Bank and National Bank of Dubai, the country’s
second- and third-largest banks, agreed to merge, in a deal that
created the largest bank in the country with $45 billion in assets
and a market value of over $12 billion, surpassing National Bank of
Abu Dhabi in both assets and value.
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By GlobalData“There is no change in the marketing strategy except for the need
for greater visibility,” said Malik.
Marketing has played a key role in the bank’s recent strategy, in a
UAE market where there has been a surge in the creativity of
promotional and loyalty schemes used to attract and retain
customers. Mashreq itself has increased its use of bold marketing:
in June, the bank overhauled its website to make it more vibrant
and easy to use.
UAE’s biggest cash competition
Also in June, Mashreq ran what it describes as the biggest cash
competition in UAE history – in a one-off upgrade of its regular,
monthly MashreqMillionaire competition, which offers AED1 million
to customers who buy special savings certificates, the bank raised
the prize to AED5 million.
The special MashreqMillionaire draw was part of the bank’s 40th
anniversary celebrations. The MashreqMillionaire saving scheme is
marketed as a risk-free investment: the more certificates a
customer owns, the more chances they have of winning. Certificates
are carried over every month and can be encashed at full value for
no charge. MashreqMillionaire has created 159 dirham
millionaires over the past 12 years, paying out over AED267 million
in prizes.
The aim of Mashreq’s rebranding in May, says Malik, was to enhance
the bank’s relationship with its customers and partners. The
unveiling of the new name and logo came at the end of a three-year
study undertaken by the bank to map out a new brand direction. “The
new brand values, the corporate vision and the culture change have
been very encouraging so far. The whole team is energised, excited
and encouraged by the business results and customer feedback since
the new brand launch,” said Malik.
The bank is planning to promote the new brand with “a few campaigns
planned for this year. A comprehensive mix of conventional media
channels will be used to reach the targeted population [but]
product development remains our forte. Changing customer profiles
and their longer term needs will be the key areas of product
development,” according to Malik.
The bank has already embarked on a programme of branch upgrades,
both internally and externally.
The bank established an Islamic banking subsidiary, Al Badr Islamic
Finance, last year and has begun promoting Sharia-compliant
products under the Al Badr brand. “There are planned initiatives to
launch Sharia-compliant products and services in the near future
through our Islamic banking arm,” added Malik.
“Customer segmentation is set to become the corner stone of the
UAE’s market dynamics. There are emerging segments like
professionals and the affluent segment that we are currently
targeting. To better align ourselves with these segments we
recently relaunched our wealth management arm – Mashreq Gold. We
are very pleased with the results and have [received] positive
customer feedback about it.”
