1. BANKINGCitibanksees floodofdepositsDUBAIKarenRemo-ListanaCitibanks loan-to-depositratio is now "significantly"lower than the Central Banks100 per cent mandate, thanksto improved liquidity in thecountry and flood ofdepositsfrom retail customers.SanjoySen,CitibanksCon-sumer Bank Head, MiddleEast, said the banks loan-to-deposit ratio in the last twoquarters of 2008 was higherthan required due to a dry-ing up of liquidity and a de-crease in deposit volumes."In the third and fourthquarters of last year a lot ofclients wanted to move outtheir money from banks butstarting from January 2009there has been a lot ofliquid-ity coming in this market; hetold Emirates Business inan interview."There is a lot of comfortfor our clients to put theirmoney with Citibank andnow we are running at a liq-uidity levelthat issignificant-ly higher than what is re-quired by the regulators.""We are runningat a liquidity levelsignificantlyhigher than whatis required bythe regulatorsSanjoySen,CitibankSensaid in addition to gov-ernments deposit guarantee,liquidity is re-entering themarket as more and moreclients who planed to movetheir money overseas arebringing it back to the UAE."There are signs of revivalin this economy, which hasto do with Abu Dhabi, Dubaiand the Middle East as awhole. Another point isthata lot of money, which previ-ously would have been in-vested in the property mar-ket, is now being put in thebank; he added."We are significantly high-er than the 1:1ratio, all our-~"-.. .-..$."......,,, . "~"-....""-:< ".: .. t,:......deposits are getting re-newed, we are receiving aflood of new deposits."The improved liquidityhasalso helped push down therates from 5.6-6 per cent inJanuary to the current 3-3.5per cent on dirham deposits."We are offering attractivereturns to our customers butwe are not paying anythingthat is out of sync with themarket. Those who offerultra high returns providesigns that they need moneydesperately; Sen said.The banksnon-performingloans (NPLs), however, haveincreased in the first half of2009, with unbudgeted lossrunning at single digit higherthan expected. But with col-lection as the frontline strat-egy of the bank, recoveryrates from NPLs on averagestand at 25-30per cent."By our norms, losses/NPLs are higher than lastyear, but we are still at veryprofitable levels. Comparedto the market, we are signifi-cantly better. We have seenthis cyclein some markets sowe have analytics tools tomeasure against that, to takepreventive measures so introubled times, we are moremature and seasoned play-ers: Sen said.The bank, which has neverhad anyjob cuts, iscutting itsoperational costs but is notslashing its marketing budg-ets. It is looking at modestgrowth in wealth manage-ment and SMEsegments andis expecting a flat/modestgrowth in other segments.Citibank, which has fivefull-fledgedbanks and fivefi-nancial centres in the coun-try, will be launching onemore financial centre.