Dubai: At a time when every bank in the UAE is competing for a share of high net worth customers, Noor Bank, a relatively new entrant in the industry is set to create a niche for itself in priority banking business.
Noor’s formula is simple. Create a nimble organisational framework that meets the customers’ wealth management, wealth preservation and regular banking needs with best in class tangible and intangible benefits.
“Priority customers are typically high value customers who are in need of multiple banking services such as, wealth creation, wealth protection, borrowing and leverage requirements and protection in terms of insurance requirements. What we are attempting to do is to take care of all these needs through a single relationship,” said Renoy Kundukulam, Head of Priority Banking at Noor Bank.
Noor’s typical priority banking client is any customer with more than Dh350,000 in liquid assets. The bank is liberal in its definition of a priority banking customer. For example if someone has a mortgage of Dh2 million and above or has a monthly income greater than Dh50,000 or above are also considered a priority customers.
With competition on the rise in the priority banking business, Noor is all set to carve out a niche for itself. “When we entered the priority banking business, most multinational banks were focused on wealth management business while the local banks were largely focused on assets and liabilities side of the business. We wanted to create an offering that combines both these elements,” said Kundukulam.
Within its priority banking, Noor is in the process of developing private banking, wealth management, treasury solutions. The bank is in the process of putting together a team of wealth managers. Noor currently has a treasury desk that is capable of creating bespoke products for its priority customers. In fact, in 2014’s best new investment solutions Middle East Banker’s award was given to Noor for its three-year capital protected commodity investment product.
In the wealth management business, Noor does not have its own asset management company. It follows an open architecture format in selecting the best in class funds and sukuks available in the market with stringent due diligence on the managers and the risk profile of the funds.
Brokerage and asset booking
Although a relatively new player in the market, Noor is serious about building its own wealth management platform. In the third quarter of this year the bank intends to launch its brokerage from the Dubai International Financial Centre. It will start with the local stocks and eventually it plans to expand to global equities. The bank also has plans to offer leverage on equity trading to its high value customers.
Currently, the bank is exploring the possibility of offshore asset booking centres in Singapore and Jersey. “The way we initially like to approach this solution is to have a tie-up rather than having our own exclusive booking centers. We are in the process of discussing with various other Islamic entities to either while label or use their platforms for our clients to book assets while client confidentiality is maintained,” said Kundukulam.
With a number of recent wealth reports suggesting a big surge in private wealth in the region, Noor sees enough space for itself to grow in the UAE and the region. Purely form a profitability angle; the priority relationships are 8 to 10 times more profitable for banks than regular retail banking business.
In creating a space for itself, Noor is willing to give more to its priority customers than its competition. “We offer preferential pricing and privileges to the customers. Every service comes with an extremely competitive and preferential pricing for priority customers with a number of special privileges such as Marhaba service at the airport and valet parking service,” he said.
With the UAE emerging as a trading and business hub of the region, there is a growing community of international business people who anchor their business and wealth management and wealth preservation from here. Noor clearly sees an opportunity in supporting this segment. “There is a growing segment of customers from countries such as Pakistan, Middle East and African countries who have businesses anchored through Dubai. Many of them prefer to keep their wealth here and managed from here. The bank is working on specialised teams to support these investors,” said Kundukulam.
