Report on Strategic Risk Management Plan at Union National Bank – Abu Dhabi

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Table of Contents
1. Introduction 3
2. Description of the business 4
3. Products and services 5
4. Market Analysis 6
5. Identifying the business problems 7
6. Sales, Revenue and Performance Indicators/Financials (5 years): 8
6.1. Pro-forma Income Statement and Balance Sheets: 9
7. Organization 9
8. Analyzing and evaluating the case situations 9
9. Exit Plan 10
10. References 11

Introduction
There is a tremendous boost in the technology and innovation that are developed in the field of construction and infrastructure across the globe. There are many elements that are dependent on the granting of funds and other financial resources from the financial institutions like international banks, insurance companies and other monetary bodies for the development of construction projects. There is a large amount of credibility and grant available if the construction project is related to the development of the infrastructure in the city. The government of UAE plays a significant role in the management of the businesses that are pertaining to the development of transportation and infrastructure through several construction projects that are being constantly developed across the country (Mosesov & Sahawneh, 2005). There has been a tremendous increase in the credit provided by the banks in UAE to the construction projects. It can be seen in the chart provided below:

(THE WALL STREET JOURNAL, 2014)

There are several factors that are to be considered while granting loans and other financial resources to any construction project by the banks. The feasibility of the project and its credibility has to be developed. For this purpose, the defects or flaws in the construction project has to be identified and evaluated from the financial aspect.
Description of the business
Union National Bank, having it’s headquarter at Abu Dhabi, is one of the leading bank providing financial resources in UAE. It was started in 1982 as a public joint stock company. However, it has undergone many up gradations and it has been providing financial aid to various business in UAE. It has about 56 branches in UAE itself. It has “Electronic delivery channels” that is complemented with large number of banking centers in UAE. It is listed in the ADX with its stock named as UNB. It has the tagline of, “the bank that cares”. It is currently jointly owned between the Abu Dhabi government and the government of Dubai. The chairman of the UNB, H. H. Sheikh Nahayan Mubarak Al Nahayan, is also the “Minister of Culture, Youth and Community Development” and he has a firm vision for the development of UNB. The Union Brokerage Company, also known as UBC is one of the oldest subsidiary of the United National Bank. It has the recognition of being one of the first national company to provide services related to the brokerage field (UNB.COM, 2016).
It also has the vision “to be a key player in the region”, UNB has also extended its services to Egypt and has developed the UNB Egypt bank center as the subsidiary of UNB. It plays a significant role in the growth and development of the local as well as international community in UAE. It has achieved an “Integrated management System”. It has been recognized with ISO 9001, ISO 14001 and OHSAS 18001 financial quality standards and it has helped in achieving tremendous boost in the financial services provided by them (UNB.COM, 2016). The contribution of the construction industry to the GDP of UAE has been provided below:

(UNB.COM, 2016)
Products and services
It has been providing financial assistance to the businesses in UAE since last 25 years. During its journey, it has evolved significantly and it has been developing new range of services and products that involves customization of the requirements of the businesses. It has played a pivotal role in the development of the construction field through providing large amount of financial aid to the private bodies as well as government entities to develop new infrastructural projects in the country (Randeree, et al., 2012).
It provides an extensive financial help to the emerging infrastructural projects in UAE. It has provided support in the financial resources required for the expansion of the Abu Dhabi International Airport. It has also facilitated the development of the Al Ain Hospital and also supported one of the first rail project in this area, “Etihad Rail”. These are the services that are provided by the in the construction and infrastructural development of various projects in UAE.

(UNB.COM, 2016)
Market Analysis
There has been a steep increase in the finance provided by the banks in UAE to the construction sector. United national Bank is one of the first bank in UAE for which ADX has distributed cash dividends (Mayenkar, 2016). The lines by the head of the Consumer banking that provides finance for the development of construction projects states that “UNB’s customer service is truly world-class and UNB conducts a variety of surveys to measure customer satisfaction at various stages of their relationship cycle with UNB” (UNB.COM, 2014).

(UNB.COM, 2014)
Identifying the business problems
There are many factors that affect the functioning of the construction company and it largely affects the success and completion of a construction project that has been taken by the company.
These problems that are being faced by the business are as follows:
• Insufficient budget,
• Incomplete processes in construction process
• Improper management of the project
• Insufficient team members involved in the management of the project
• Inadequate vision
• Unrealistic schedules of working and completion
• Delays in completion
• Shortages in the availability of resources
• Misleading targets (El-Sayegh, 2008).
Sales, Revenue and Performance Indicators/Financials (5 years):
The key performance indicator in the last 5 years tend to be the growth of the construction sector in UAE. It also includes the growth in the financial services provided by the banks to the construction sector. There has been a significant amount of share of the UNB in providing this to the businesses across UAE. The sales and the revenue generated by the UNB has been obtained from its sustainability report of 2014. There has been a financial crisis in the economy of UAE (Al-Malkawi & Pillai, 2013). Its effects on the financial sector and construction market has been shown below.
The development of the construction market across UAE has seen tremendous boost in terms of the financial revenue generation from it.

(UNB.COM, 2014)

Pro-forma Income Statement and Balance Sheets:
Pro -forma Income statement refers to the development of projected figures for a business in order to establish its suitability and sustainability across several functions in UAE. It has been set forward to propose a business plan for a company.
For UNB, the projected figures are to be developed on the basis of the past income generated and costs incurred in its working. It has been provided in the figure below (UNB.COM, 2014):

(UNB.COM, 2014)
Analyzing and evaluating the case situations in the Organization
In the next 5 years, the UNB should be procrastinating the construction sector in UAE. It should be providing financial aid to the construction projects after evaluating the feasibility of the project and obtaining its success rate. The returns that can be generated from the projects have to be taken into consideration for the same. In the next 5 years, there are large number of projects developed due to the announcement of the Dubai Expo 2020. It will have a significant impact on the overall infrastructure and revenue generation across the construction projects in UAE. There are many projected delays in the construction industry that is involved in developing several infrastructural facilities in UAE (Motaleb & Kishk, 2013). In this way, the problems that have been discussed in the construction section have to be handled and managed for ensuring feasibility and sustainability across the financial support provided by the UNB.
Exit Plan
Exit plan plays a pivotal role in the management of the financial sources that are possessed by a company. It refers to the strategies that are developed while leaving a company or completing a project in the company (Anon., 2014). UNB provides special financial norms and provisions for the construction companies to develop an exit plan and on the basis of that the construction projects are completed. There are many risks that are to be assessed while developing a financial aid to the construction sector in UAE.

References
Al-Malkawi, H. & Pillai, R., 2013. The impact of financial crisis on UAE real estate and construction sector: analysis and implications.. Humanomics, 29(2), pp. 115-135..
Anon., 2014. Creating a business exit strategy. [Online]
Available at: https://www.commbank.com.au/business/can/leaving-a-business/creating-an-exit-strategy.html
[Accessed 3 March 2016].
El-Sayegh, S. M., 2008. Risk assessment and allocation in the UAE construction industry.. International Journal of Project Management, 26(4), pp. 431-438..
Mayenkar, S. S., 2016. ADX distributed cash dividends on behalf of UNB. [Online]
Available at: http://gulfnews.com/in-focus/companies/union-national-bank?page=union+national+bank
[Accessed 2 March 2016].
Mosesov, A. & Sahawneh, N., 2005. UAE: Financial development and economic growth.. Skyline Business Journal, Volume 1, pp. 1-11..
Motaleb, O. & Kishk, M., 2013. An investigation into the risk of construction project delays in the UAE.. International Journal of Information Technology Project Management, 4(3).
Randeree, K., Mahal, A. & Narwani, A., 2012. A business continuity management maturity model for the UAE banking sector.. Business Process Management Journal, 18(3), pp. 472-492..
THE WALL STREET JOURNAL, 2014. Sharp Jump in UAE Bank Lending to Construction A Concern?. [Online]
Available at: http://blogs.wsj.com/middleeast/2014/06/04/sharp-jump-in-uae-bank-lending-to-construction-a-concern/
[Accessed 2 March 2016].
UNB.COM, 2014. Sustainability Report 2014. [Online]
Available at: http://www.unb.com/English/SustainRpt2014.pdf
[Accessed 2 March 2016].
UNB.COM, 2016. About Us. [Online]
Available at: http://www.unb.com/English/inner.aspx?p=6&mid=328
[Accessed 2 March 2016].

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Posted on

March 9, 2018

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