New Central Bank regulations on retail lending will have a limited effect on profits at Abu Dhabi Commercial Bank (ADCB), its chief executive says.
But Ala'a Eraiqatalso said the new rules would benefit the UAE banking sector as a whole.
The Emirates' third-biggest lender by assets acquired the retail banking business of Royal Bank of Scotland last year, but the gains could be curtailed by new regulations from the banking regulator that include limiting loans to 20 times a customer's monthly salary and curbing excessive fees.
"We're not changing strategy," Mr Eraiqat said yesterday. "Any effect on profitability, we'll have to see it when it comes into effect. It's our job to compensate from different sources.
"Our strategy remains within the UAE, with core business and core geography."
However, the net effect of the new regulations would be a stronger banking sector, he said. "All of these regulations are good and make the banking industry more responsible."
ADCB did not expect any dent in profits after the Central Bank's recent circular banning the marketing of bank products by telephone, he added. "Telemarketing's direct effect will not be big and will not be difficult to compensate for," he said.
But he added that ADCB was still in discussions with the Central Bank over an appropriate timetable for implementing the industry-wide regulations.
"We're in discussions," Mr Eraiqat said, stopping short of revealing whether the UAE's bankshad won any further concessions.
The fact that the UAE's banks had been successful in postponing the implementation of the new rules could reflect a more consensual approach to regulation of the sector, said Raj Madha, a financial analyst at Rasmala Investment Bank.
"It seems to me [the circular] has been used as a discussion document. If so, that's a positive development."
The bank also confirmed that it had appointed Goldman Sachs and Bank of America Merrill Lynch as it mulls the future of its 25 per cent stake in RHB Capital, a Malaysian lender.
Separately, the bank announced it had appointed Lord Davies of Abersoch to its board as an adviser.
Lord Davies is the vice chairman of Corsair Capital, a private-equity firm, and was the trade minister in Gordon Brown's UK Labour government. The bank also appointed PricewaterhouseCoopers as external auditors, replacing Deloitte & Touche. ADCB stock has gained more than 25 per cent this year.