By: Amr Adel
Dubai – Mubasher: A slowdown is expected in financial transfers from the UAE to abroad by 10% year-on-year in 2016, according to Mohammed Ali Al Ansari, chairman and managing director of Al Ansari Exchange.
A decline in the growth rate of remittances from the UAE is expected to reached 3-5% in 2016, down from double digit growth of 15% in 2015, the top official noted during a press conference in Dubai.
Among the reasons for the retreating growth rate is the economic surge that occurred last year, Al Ansari said, noting that this year’s rate will be harder to calculate due to the decline in new foreign workers entering the UAE added to the completion of several real estate projects.
It is likely that small and medium-sized exchanges will exit the local market this year or early next year on the back of rising operating costs as well as their inability to compete or meeting the Central Bank of the UAE’s (CBUAE) requirements regarding raising capital, the chairman highlighted.
Acquisition of exchange firms by new investors is “likely”, especially in light of the difficulties that many companies are facing, the top official noted during the press conference.
Responding to a question, Al Ansari said that the CBUAE’s strictness in giving out new licences and new branch licences is important as it supports the market and protects financial institutions.
He warned of exchange firms and small remittance firms lowering transfer fees significantly in order to increase the market share, which may impact the quality of services provided to customers.
Such a step will also pose a problem for larger companies who electronic systems, higher branch rents in malls and other items contribute to raising their operating expenses, the top official added.
Al Ansari’s operations exceeded 35% of total remittances, which stood at AED 120 billion, from the UAE to abroad in 2015.
Translated by: Nada Adel Sobhi
