A key player in the UAE's banking sector has said "a sense of fragility" still threatened a full recovery of the country's economy. Rick Pudner, CEO of Emirates NBD, said the first quarter of 2011 had seen signs of improvement in some of the UAE's non-oil sectors but added that the country was "not entirely out of the woods yet".
International banks have laid off hundreds of thousands of employees globally, leaving the UAE less of a priority. ‘Signs are emerging of a recovery, albeit a tentative one, in banking’, said Jonathan Morris, the UAE chief executive of Standard Chartered. "I genuinely think lessons have been learnt from the crisis," he added.
Emirates NBD's forced takeover of Dubai Bank was perhaps not the type of consolidation in the sector that some in the industry had hoped for. With interest rates on deposits at historic lows and faith in banks' strength shaken by the financial crisis, many retail investors have shifted assets from banks to online trading in currencies and bullion. Over-reliance on lending to government-related entities led to the downfall of Dubai Bank, which has been recently taken over by Emirates NBD.
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