growing gcc wealth sees influx of private banks

The increased wealth of those living in the Gulf Cooperation Council countries, particularly Qatar and the UAE, is drawing in private banks from around the world, according to early findings from an ongoing study.

growing gcc wealth sees influx of private banks

A recent report from internationally renowned research firm Boston Consulting found that Qatar has the highest density of dollar millionaires in the world, with the United Arab Emirates reaching ninth of the list.

According to Nigel Sillitoe, chief executive of UAE-based research house Insight Discovery, which is currently conducting an in-depth report in the world of private banking, this high level of wealth is attracting a significant number of new private banks to the region.

“At the moment there are around 64 private banks operating in the GCC – around 90% of which are based in the UAE and we estimate that by the time we have completed our study in September this figure will have risen to 75,” said Sillitoe. “This is around three times the number of licensed financial advisory firms operating in the UAE.”

Insight Discovery said its report, which Sillitoe claims will be the first time research will be available on private banks in the GCC, will look to uncover who the key players are, where they are booking their business, how much they manage and the number of private bankers they have.

Notable firms which have opened in recent months include Arbuthnot Latham, which opened an office in the Dubai International Finance Centre in March, LGT private Bank, which opened in the DIFC in February, and ES Bankers (part of Espírito Santo Financial Group) which also opened in the DIFC.

Increased competition

However, this influx of new private banks has meant competition has increased and Sillitoe estimates that for every three new banks which open, between one and two close. Silitoe said one of the reasons for this is an increase in the demand for Islamic banking in the region which some of the newcomers simply cannot offer.

Listen below to an interview with Nigel Sillitoe where he discusses the closure of some private banks

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In conducting the survey, Sillitoe said he hoped to shed some light on the private banking industry in part to assist asset management firms which hope to target their products at the clients of these companies.

“Asset managers get a lot of business from private banks but they are not currently able to work out exactly where this business is coming from because the private banks tend to consolidate their worldwide assets before making an investment,” said Sillitoe.

“Hopefully private banks will become more transparent and we can help with this report.”

The report is due for publication in late September or early October.

Click here to read the findings from Insight Discovery’s recent Middle East Investment Panorama report

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