Even as some international players contend Dubai has insufficient resources to cover its debt, a leading bank in the country says much of these claims are not based on truth.

"There has been a lot of exaggeration about what's going on in Dubai and much of it is not based on truth. What matters is what the leaders and appropriate authorities in Dubai say," Dr Adnan Chilwan, Executive Vice-President and Chief of Retail Banking at Dubai Islamic Bank (DIB), told Emirates Business.

"Recently, there have been statements which indicate Dubai will be able to settle or refinance its debts. This has been received very positively within the market and has put to rest a lot of speculation," he said.

"It would be ignorant to say things have not changed. After all, we are a part of the world economy, which is in the process of stabilising after the recent global crisis. However, I am cautiously optimistic the worldwide economy will continue to progress well towards the recovery process, even though some say the worst has yet to come. In my opinion, there is only one way to go from here – that is up north," Chilwan said.

He believes consumer confidence will improve as the economy progresses. "We may not be at the same level as 2008 but it is a step in the right direction. People believe it is now time to move ahead."

Despite the claims of a shrinking population in the Emirates, Dubai Islamic Bank has been growing its retail base, says Chilwan.

"In 2009, we planned to increase our customer base by 15 per cent to reach 900,000 and we wanted to increase our branch network by 10 across the country and increase our asset base by 20 per cent. We are on track."

He said: "We will continue to strengthen our position in assets as well as liabilities. There will be new initiatives, campaigns and the focus will not just be on asset but also liabilities, these being the core business of any retail bank."

Given the high spending levels in the UAE, DIB will continue to focus on retail banking next year and beyond. "Our plans have materialised this year in terms of expansion, customers, market share and product initiatives. We are in the right direction and we will continue to focus on retail banking. More banks in the country realise retail banking is the way to go forward."

On mergers and acquisitions, Chilwan said: "In my personal opinion, there should be mergers and consolidations within the industry considering the market is already overbanked.

"In view of the global crisis, it is apparent that some large and profitable players will have to take charge of the smaller and weaker ones," he said.

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