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Merrill Lynch looking to open Qatar and Kuwait offices by year-end
Troubled US bank Merrill Lynch is to expand operations in Qatar and Kuwait, the bank's chief executive, John Thain, said on Sunday.
- Staff Report
- Published: 00:55 October 21, 2008
Dubai: Troubled US bank Merrill Lynch is to expand operations in Qatar and Kuwait, the bank's chief executive, John Thain, said on Sunday.
Thain said Merrill Lynch will open its Qatar and Kuwait offices by the end of the year and will also increase its wealth management business in the Gulf.
He told reporters at roundtable discussions in Dubai that the UAE and other Gulf states faced an economic slowdown but he still saw great opportunity for investors.
Huge advantage
Thain said sovereign wealth funds backed by the UAE and other Gulf states have a "huge advantage" in that they still have funds to invest as banks pull back on lending. "There are a lot of opportunities. The sovereign wealth funds have great opportunities to make attractive investments," he said.
Oil-producing countries would be largely sheltered from the worst effects of the credit crunch, he said, but voiced the view that the Gulf states could not completely escape the global crisis.
"There is no question that growth rates will slow down. No country is decoupled from the global economy. It's only a question of how much they will slow down," he said.
However, Thain continued to strike an upbeat note about the Gulf's long-term potential.
"We continue to be optimistic about the long-term prospects here, that's why we're expanding our business," he said.
Asked why Merrill Lynch was expanding during a global economic crisis, he said that the bank saw opportunity in fixed income commodities, equities, derivatives and other investments.
On the US economy, he said he believed there will be "some unfreezing" in inter-bank lending but that the focus is now on problems in the wider economy.
He warned that the crisis will not end in the next six months and that it could take years before confidence is restored.
State socialism
Thain joked that large-scale government intervention did not herald the arrival of "state socialism" on Wall Street.
"I don't think we are fundamentally undermining the capitalist system but there will be more government involvement and regulation will be strengthened," he said, adding that it would have been hard to predict nine months ago that the "excesses in the system" would have brought on such large-scale problems.
Last Thursday, Merrill announced a third-quarter net loss of $5.2 billion, largely due to losses from debt securities.
The bank lost heavily on the sale of mortgage-back securities, including securities issued by US-government-backed lenders Fannie Mae and Freddie Mac.
Last month, Thain agreed to sell Merrill to Bank of America. Yesterday, he told reporters he expected the deal to be completed by the end of the year.
He said that being head of Merrill Lynch has been a "chaotic" and "wild" experience since he took over in November of last year.
Earlier this month, Thain was appointed president of Bank of America's Global Banking, Securities and Wealth Management, a new division that will include the bank's corporate and investment operations.
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