Credit card spending is expected to slow this year, predicts a leading banker.
Emirates NBD, Dubai’s biggest bank, has benefited from an annual growth rate of about 20 per cent on card spending over the past three years. But that could dip to 18 per cent this year, said Suvo Sarkar, the group head of retail banking and wealth management at Emirates NBD.
He did not disclose the value of spending on credit cards.
Banks are competing fiercely to win more credit card customers by offering attractive perks and benefits from free flights to football tickets.
Yesterday Emirates NBD continued that trend with the launch of its Starwood Preferred Guest World MasterCard targeted at people with monthly salaries above Dh30,000. At Emirates NBD, about 17 per cent of credit card spending is on hotels and dining, with 13 per spent on travel. The bank said it has more than 1 million card users.
“Even if the economy slows down, expats will still go home once or twice a year, and business travel will continue,” Mr Sarkar said. “We are not talking about growth in spend, we are talking about displacement of cash transactions into card transactions.”
About 80 per cent of retail transactions in the UAE are still in cash, he says.
Total bank deposits decreased by Dh4.4 billion during August, according the Central Bank, falling to Dh1.43 trillion.
The decline was attributed to a decrease of Dh11.7bn in resident deposits and an increase of Dh7.3bn in non-resident deposits. In July, total bank deposits decreased by Dh9.1bn, touching Dh1.43tn.
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