Dubai: Private banking land scape in the Middle East is fast changing with the rapid growth in private wealth, increased completion competition among local and international private wealth managers, and the changing needs of the new generation wealthy, said Fouad Hamiyeh, regional head of Credit Agricole Private Banking.
“Private banking requirements of the region are changing rapidly and the industry needs to adapt quickly if they want to stay in the game,” said Hamiyeh.
Post-9/11 and post-global financial crisis there have been huge regulatory demands on the private banking industry to be more transparent. The changes according to Hamiyeh have been positive for both the industry and clients across the world.
According to Boston Consulting Group’s 2014 Global Wealth Report, private financial wealth in the Middle East region grew by 11.6 per cent to reach $5.2 trillion (Dh19 trillion) in 2013 with GCC countries leading the wealth surge. Key drivers were generally high saving rates and continued strong nominal gross domestic product growth in oil-rich countries, such as Saudi Arabia, Kuwait and the UAE.
High growth in private wealth makes this region very attractive to the private banking industry. Most of the leading names in the industry are already here or are attempting to enter the market. In context of the strong growth in wealth across the region, banks who already have a presence in the region are increasingly committing more resources here.
Responding to the growing wealth management needs of regional clients, a number of regional and local banks have also started offering private banking services to their clients.
Private banking offerings
“Regional and local banks are well established with a strong client base and long presence here. Now they can’t ignore the fact that they have to offer private banking services to their high net worth customers and this is why we are witnessing an increase in more sophisticated private banking offerings that are coming from local and regional banks,” said Hamiyeh.
The presence of global players and the entry of new local and regional banks have seen the competition intensifying the industry. The competitive environment makes everyone wanting to do better, offer quality competition. “Yes there is a lot of competition, the UAE is a playground of competition because everyone wants to be here and wants a share in the private banking business,” he said.
With the increasing competition in the business, “suitcase banking” is fast disappearing. Earlier a number of international banks used to manage their regional clients with minimal local presence through small regional offices or occasional visits, while bulk of the business was managed from their New York, London or Geneva offices. But competition is forcing many to have a local/regional presence.
