BLME to open office in Dubai

DUBAI: The UK’s Bank of London and the Middle East plans to open an office in Dubai as its assets grow and the emirate tries to turn itself into a global hub for Islamic finance, its chief executive said Wednesday.

BLME, set up six years ago and owned primarily by Kuwaiti shareholders, saw total assets reach more than £1 billion (Dh5.6 billion) at the end of last year and has already exceeded a further 15 per cent growth target this year, chief executive Humphrey Percy said in an interview with Zawya Dow Jones.

Given that growth and the maturation of Dubai as a financial services centre, he said, it was the right time for the bank to open its first office outside the UK in the Dubai International Financial Centre. BLME does corporate banking, private banking and asset management, adhering to principles of Islamic law that forbid charging or paying interest, among other strictures.

“We’re almost exactly six years old, we’ve got an established business, and at this point in the economic cycle and the maturity of Dubai, it just seemed absolutely right for us to establish an office here,” Mr Percy said.

Another reason to move to Dubai was a rise in Islamic finance activity emanating from the Gulf, he said, in particular the spike in regional issuance of Islamic bonds, or sukuk.

“You have to have knowledge and presence because you end up holding a lot of those sukuks,” Mr Percy said.

Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, announced an initiative in January to place the emirate at the centre of the global Islamic economy. While Bahrain had long been a hub in the Arab Gulf for Islamic finance, social unrest there has put its position in jeopardy.

Five years ago, Bahrain might have been considered the Middle East’s Islamic financial centre, Mr Percy said, but now “there is a real opportunity for Dubai, which I think Dubai is going to seize successfully simply because there hasn’t been a focus for some time now for Islamic finance in this region and Dubai has recognised that and I think has a very good chance of achieving it.”

BLME’s office in Dubai will be a representative office, Mr Percy said. It will promote the bank’s services, but no investment funds or lending will be domiciled in Dubai.