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Dawn of the wealth managers

By Alicia Buller September 2011

Private bankers have set their sights on the region's growing cash pile.
It's official: private bankers have flooded the region. This year, as an editor, I have received 1,000 per cent more calls on this sector than at any other stage in my career.

As the US and Euro debt crisis deepens, the notion that the Middle East and Asia offers growth and richer harbours is only intensifying. When the US Dodd-Frank bill clamped down on Wall Street banks and leveraged debt instruments, financial big-hitters from UBS to JP Morgan and Merill Lynch set their sights on building global wealth management franchises. With these firms still smarting from the sting of billion dollar losses associated with financial derivatives and sub-prime mortgages, fee-generating business represented a more robust way to salve the balance sheets.

Naturally, the most coveted prize for a private banker is the Ultra High Net Worth individual (UHNW). This is banking terminology for 'richer than most'. The region is home to 400,000 of these uber-clients; and this formidable figure is growing by the day. The Boston Consulting Group reported that this group of millionaires controlled a total $2 trillion assets in the region in 2010. It is even more significant that this figure will rise to $6.7 trillion by 2015.

Consistently high oil prices and above average economic growth have bestowed the Gulf populace with some of the largest personal nest eggs in the world. So, while the major global and Swiss banks pencilled in the UAE and the Middle East as part of their emerging markets expansion strategy as far back as the 1990s, the race is now on to woo the wealthy and clinch a slice of their expanding investment portfolios. The turbulent ecomonic climate also means the region's mega-rich are in need of more sophisticated investment advice than ever before.

One drawback for wealth managers amid the current global economic crisis is the dampened client confidence in financial instruments and the renewed desire for investing in low risk commodities and Western real estate. But the opportunities in the local wealth market far outweigh the challenges.

It is Dubai that has the potential to reap the most benefits from the combination of the Arab Spring and the US and Euro turmoil. The emirate is currently capitalising on its status as a 'safe haven' and is consequently enjoying additional capital inflows as spooked regional investors shift their cash. Dubai must seize this moment to uphold its cosmopolitan International Financial Centre hub, build on its wealth management talent pool and develop its overall banking infrastructure with the aim of being a globally recognised private banking capital - the Gulf equivalent of Switzerland or Singapore. That time is now.

In this month's private banking special report, Gulf Business speaks to the some of the region's top wealth managers about the challenges and opportunities that lay ahead.

Gary Dugan, chief investment officer, Emirates NBD Private Banking

Emirates NBD has been perhaps the best placed of the Gulf-based banking groups to benefit from the recent political turmoil.

Dubai's top bank has witnessed a renewed optimism around the emirate as a safe bet amid the uncertainty. Over the last nine months, rich investors have turned to the GCC's biggest bank to protect their cash. Emirates NBD 's private banking business has helped drive the group's positive first half results, which saw profits rise 43 per cent year-on-year to Dhs2.2 billion. The UAE's biggest lender by assets reported a net income of Dhs744 million in the second quarter of the year, up 85 per cent compared to Dhs403 million in the same period last year.

Gary Dugan, chief investment officer for private banking, said his clients were "pleasantly surprised" that Dubai profited from the geo-political problems in the Middle East. "In general, there's been more trading, a rise in airline passengers and a marked turnaround in the hotel sector, all of which has helped us."

Deposits at the bank have remained buoyant as wealth investors seek security over riskier assets. Overall in the UAE, deposits held by banks increased seven per cent to $306 billion during the first five months of the year, surpassing the increase for the whole of the previous year, according to data from the central bank.

Dugan said he had struggled to convince private banking clients to diversify their holdings though. "The appetite for real estate or private equity has waned. We've spent the last year trying to rebuild confidence in our client base and tempt them to go for something slightly riskier."

High yield bonds and corporate bonds have become the mainstay for investors, although the bank has seen a pick up in appetite for commodities and local equities in the second quarter of the year.

There has also been growing demand so far this year for gold certificates, a product the bank launched in late 2010.

"There's been a consistent backing of gold, especially gold certificates and the delivery of gold. It's given us a chance to take greater market share," said Dugan. "Most clients we find are underrepresented by gold in their portfolios; they have on average about one to two per cent, but we recommend seven to eight per cent of their total worth." Gold prices have remained high against the backdrop of instability in the Eurozone and US economies.

It seems that persuading wealthy clients to look beyond gold to more exotic and high-yielding investments is the private bank's toughest challenge. "Our typical client is mostly conservative, with assets in cash or near cash, with an average of about $2 million to $3 million to invest. But we're almost back to levels of confidence seen around the time of the financial crisis, with major concern over global events being reflected in clients' risk appetite," said Dugan.

The Emirates NBD Group has had to tackle demons from the past, in particular its exposure to major corporate restructuring in Dubai and the real estate sector. Indeed, Business Monitor International has said that the UAE's banking sector is set to underperform its regional peers over the next 18 months as concerns about a weak real estate market and Dubai's debt overhang will continue to weigh.

Meanwhile, the latest results also show that impairment charges were high at Dhs2.35 billion compared to Dhs1.74 billion in the first half of 2010. Dugan's private banking function will be critical to convert the groundswell of confidence currently supporting Dubai's hopes into sustainable revenues that can be registered at a group level.

FACTS

Emirates NBD was formed in 2007 by the merger of Dubai's largest banks, Emirates Bank International and the National Bank of Dubai. It is the largest bank in the UAE and GCC by total assets. It has a market share of loans and deposits in the UAE of around 19 per cent, though its business is concentrated in Dubai. The bank is active in private banking, retail, corporate and Islamic banking and also has businesses in brokerage, insurance, asset management, card processing and trade finance services. The bank is 55.6 per cent owned by the Investment Corporation of Dubai, which, in turn, is majority owned by the government of Dubai.

Rohit Walia, executive vice chairman & CEO, Bank Sarasin-Alpen Group, Middle East and India.

In a business that maximises wealth, Swiss-owned Bank Sarasin-Alpen has been called on to play the role of wealth protector in the last six months as clients shy away from risk.

The bank, which is one of various units in the region owned by Bank Sarasin based in Basel, started Gulf operations in 2005 with the launch of its Dubai office. It has since spread to Doha, Muscat, Manama and most recently Abu Dhabi.

GCC clients are now more cautious about taking bets with their money after suffering heavy losses from the financial crisis. There has been also been "heightened risk aversion" so far in 2011 in response to the Japanese tsunami, conflict in North Africa and a US and European debt crisis, said Rohit Walia, executive vice chairman & CEO, Bank Sarasin-Alpen Group, Middle East and India.

"From a client's perspective, they are now more aware of the risks associated with the investments and have wealth preservation at the back of their minds even when they evaluate opportunities for wealth creation. Before the crisis they were more interested in building their wealth but now they also want us to keep their wealth safe and secure."

As the battle for Gulf wealth heated up in recent years, Bank Sarasin-Alpen's approach has been to deploy experienced boots on the ground to its GCC offices. Most recently, it hired ex-EFG private banker Neil Ashford as a managing director and head of its Abu Dhabi office.

Part of the difficulty in building private banking businesses in the region is that simply having a physical presence doesn't guarantee success. But, hiring bankers that have a 'little black book' with access to the right people does. Much of the wealth is centralised in family offices, and having a strong and trusted relationship with these firms is key to success. In that sense, Ashford was one of a rare breed, having more than 30 years of banking experience spanning across private, corporate and trust intermediary banking.

Analysts say that if private banks manage to get a foothold with these family offices, it gives them an opportunity to leverage their relationship to sell more sophisticated products and services to key players in the region.

"The fact that we are present in most of the GCC countries ensures that we are available to meet our clients when they want to see us and move away from the concept of suitcase banking," said Walia.

Bank Sarasin-Alpen has not been alone in this strategy. In April, Deutsche Bank unveiled Serene El Masri as its head of private wealth management for the Mena region, joining from BNP Paribas. Mark Winzenried joined Lloyds TSB Private Banking from Arab Bank while Abu Dhabi Islamic Bank named Stuart Crocker as head of private banking from HSBC. In May, UBS hired Albert Momdjian, previously head of investment banking for MENA at Credit Agricole, for a senior wealth management position.

Walia added: "With the increasing number of banks appearing in the region, there is definitely a danger of oversaturation. There are over 50 banks in the UAE. In addition, the Dubai International Financial Centre has a host of other banks and financial institutions."

Meanwhile, despite housing three of the densest millionaire populations in 2010 - Qatar, Kuwait and the UAE, the Middle East has become safe-obsessed. Less risky investments such as fixed income have, therefore, grown in popularity. "We have taken advantage of this for clients, especially in high Indian interest rates by bringing Indian debt issues to them."

There is some optimism that the pick up in investment and tourism in the GCC's so-called 'safe havens' like Dubai could produce results in the medium term. "Although this [investment] has not yet translated into better equity markets I believe it will do so in the not too distant future," added Walia.

FACTS

The Sarasin Group, which owns Bank Sarasin and in turn Bank Sarasin-Alpen, has its roots as a leading Swiss private bank that dates back to 1841. The Group is now represented in more than 20 locations in Europe, the Middle East, and Asia. As of 30 June 2011 it managed total client assets of $129 billion and employed more than 1,600 staff.

Tamer Rashad, head of Middle East at Merrill Lynch Wealth Management

Private banking is a notoriously male-dominated profession, but rich female investors have become one of the key drivers for wealth management services in the Middle East, according to Merrill Lynch Wealth Management. This unit of Bank of America has been operating an office in Dubai since the 1970s, and has witnessed serious demographic changes taking hold in the region.

One of the most recent shifts is that women are stepping up and demanding investment solutions from private banks, said Tamer Rashad, head of Middle East at Merrill Lynch Wealth Management.

Historically, women have been overlooked or undervalued as private banking clients, despite controlling 22 per cent (or $500 billion) of the wealth in the region, according to the Boston Consulting Group. After falling sharply in 2008, women's wealth grew by nearly 15 per cent in the Middle East in 2009 and Boston Consulting projects that the amount of wealth controlled globally by women will grow at an average annual rate of eight per cent through until 2014.

Rashad said there had been an "increased interest" from women in the region for Merrill Lynch's products. He said high GDP and savings had also boosted demand in the industry, adding: "Clients are seeking more sophisticated solutions around wealth management, investment returns and transferring wealth to the next generation."

Merrill Lynch Wealth Management first opened a Middle East office in Beirut, Lebanon, 49 years ago and now operates in offices in Bahrain and Riyadh, as well as Geneva, London and Monte Carlo. It has an office in the Dubai International Financial Centre and one outside the business park.

In September 2008, Bank of America announced its intentions to purchase Merrill Lynch & Co., in an all-stock deal worth approximately $50 billion. Merrill Lynch was at the time within days of collapse, and the acquisition effectively saved Merrill from bankruptcy. Merrill Lynch is now the largest and most profitable wealth manager in the world, according to Scorpio Partnership's Annual Private Banking Benchmark for 2010.

In recent months, Rashad has overseen a hiring spree intended to strengthen the bank's position in the Middle East. Most recently, Leila Alameddine joined as market manager for Levant, Shereen Ghobrial as regional sales manager, Utku Balik as business strategy and initiatives execution manager, and Ahmed Barakat as UAE market manager.

Tamer Rashad relocated to Dubai from New York in 2010, prior to which he was head of global relationship capital intelligence and a member of the office of the president & chief operating officer at Merrill Lynch.

Contrary to sentiment in other private banks currently operating in the Gulf, Rashad said there had actually been an increase in risk appetite: "More equity, less cash and lower investment in local real estate from clients." He added: "Changes taking place in the Middle East provide a dynamic opportunity for the region. We are witnessing a rapidly growing interest from clients to expand the breadth of their portfolios and increase exposure to international investments."

Heavy investment in in-house research facilities over the last decade has given Merrill Lynch an edge over its competitors to better understand the demands of markets like the Middle East. The bank has grown its research component and now publishes one of the most recognised research documents on private banking activity, the Merrill Lynch Global Wealth Management and Capgemini survey.

According to the latest survey in June, at the end of 2010 the number of HNWIs grew in Saudi Arabia and Bahrain but declined marginally in the UAE.

"The past few years have seen great fluctuations in HNWI's wealth and population," said Rashad "In 2010, we saw growth rates slow down from the higher double-digit levels of 2009 when many markets were quickly returning from significant crisis-related losses."

FACTS

Merrill Lynch Global Wealth Management had 15,700 financial advisors and more than $1.5 trillion in client balances as of March 31, 2011. Two-thirds of the firm's relationships are with clients who have a net worth of $1 million or more.

Merrill Lynch Global Wealth Management is owned by Bank of America, which is the world's largest private bank, with $1.74 trillion in assets under management.

Arnaud Leclercq, head of new markets at Lombard Odier

Although wealthy GCC investors remain strong backers of local economies, Geneva-based Lombard Odier has witnessed a spike in money being sent overseas. The Swiss private bank, which services ultra high net worth clients out of a representative office in Dubai, manages $167 billion in global assets.

Increasingly, local investors are shifting their wealth outside the Gulf region and requesting sophisticated funds to preserve their families' net worth, said Arnaud Leclercq, head of new markets at the firm. "A number of wealthy individuals, in particular Emiratis and Saudis who have been typically invested only locally are deciding to reallocate a portion of their wealth outside of the Arab World," he said.

In the past, Saudis have held 90 per cent of their wealth locally, but Leclercq said there had been a marked shift recently, and this figure is now closer to 70 per cent. GCC investors have looked to diversify their investments and spread risk following prolonged turbulence in local markets.

"We have also seen an increased level of interest from the very large and wealthy families in setting up family funds outside of the region, in the shape of a reserve fund, very similar to how a sovereign wealth fund functions. "Investors have also become increasingly savvy, and they now are looking for banks that can provide diversified booking centres outside of the Gulf, in places such as Geneva and Singapore," said Leclercq.

Lombard Odier has been a dominant player in private banking since it was established in 1796. Much of this brand capital has contributed to its growth in the Middle East.

The firm has had ties to the region since the 1970s but only opened a representative office in Dubai in 2007. It has, however, been criticised for taking a less aggressive stance than some of its competitors, such as Credit Suisse and Julius Baer, in targeting the region's wealthy individuals. Less than 10 per cent of its managed assets come from the Middle East - a proportion the bank is trying to raise to 20 per cent in the next four years.

Out of its office in Dubai, it is planning to continue expansion into what it calls 'new markets', which include the rest of the Middle East, Central Asia, Russia and Turkey. To underline the commitment to this planned growth, Leclercq said he himself will be relocating from Geneva to Dubai by the end of 2011.

"We have already begun to select a number of senior bankers and specialists to cover these areas, so there are clear plans to expand not only in the local market, but also to establish Dubai as one of our three global hubs: Switzerland, Singapore and now Dubai," he said.

There has been a flood of private bankers to the region in recent years, raising concerns that the market could quickly become over-saturated. But Leclercq is defiant: " Lombard Odier works in the UHNW segment... We are one of the world's largest private banks involved in this specific segment. Indeed, there are not many banks - if any - that are as involved on the local level as much as we are."

He did issue one word of caution in the short-term: "Over the period of the last 18 months, we certainly have noticed that a number of clients have decided to reallocate their resources to areas other than wealth management - in the sense of private banking. For example, they are opting to reinvest in real estate in the West, buy gold or simply holding cash - all rather than have their assets managed."

FACTS

Founded in 1796, Lombard Odier Darier Hentsch & Cie is the oldest firm of private bankers in Geneva and one of the largest in Switzerland and Europe. With a network of 23 offices in 17 countries, it offers its private and institutional clients a wide range of advisory services in wealth management, financial products, and specialised areas. An independent family business for seven generations, the firm is run by seven Partners.

It has been offering private banking services and solutions to the Middle East for more than 50 years. In February 2007, the firm established a formal presence in the region with the launch of a representative office in Dubai.

Eduardo Leemann, CEO of Falcon Private Bank

Falcon Private Bank may be small and nimble, but it is owned by Abu Dhabi's mighty Aabar Investments , a fact that has allowed it to punch above its weight in the Middle East.

Managing $13.5 billion in assets, the Zurich-based wealth manager is dwarfed by a lot of its Swiss competitors. But the presence of Aabar, which bought the firm in late 2008, provided instant credibility and reassurance for potential Gulf clients. This is a reality not lost on Falcon CEO Eduardo Leemann, who said: "Without Aabar it's very difficult to expand into the region. Our owners are extremely well-known and respected."

Aabar is regularly called upon to identify the "good guys and bad guys" in the Middle East, he said. "This high level local knowledge means that it's almost like operating in Falcon's home market. It's like having our Zurich clients just round the corner." But the relationship comes at a price for Falcon, which must seek authorisation from Aabar on major decisions, typically large credit facilities above $25 million or certain high-risk investments. A large capital deployment, such as the acquisition of another bank or buying a new IT system, would also require Aabar's sign-off.

Leemann added that the arrangement doesn't extend to the Abu Dhabi company sharing its GCC private banking contacts. Still, Falcon expects its assets under management to nearly double to $25 billion in five years as it taps the growing wealth in Gulf and Asian markets. The bank, formerly known as AIG Private Bank, was bought from the crippled US insurance giant AIG by Aabar in 2008 for 288 million Swiss francs (Dhs1.2 billion).

Falcon seeks to target individuals with a minimum wealth of $5 million. In the UAE, it currently manages $600 million of assets, but Leemann said by the end of 2011 this could hit $1 billion. It opened a branch in Abu Dhabi in April, joining its existing branches in Dubai, Hong Kong, Singapore and Geneva. Falcon has also applied for an investment advisory licence with the UAE Central Bank that is currently under processing.

"Middle East investors go with Falcon because they like to have local investments booked somewhere else, for instance Singapore or Zurich," said Leemann. "For them it's about political diversity and the diversification of risk. They like Arab National Bank and First Gulf, but they also like us."

He said there was a danger of the Gulf getting overcrowded, especially with rivals Julius Baer, UBS, JP Morgan and Bank Sarasin expanding their operations, but he added that the region was "still very attractive".

Leeman admits that Falcon, like other banks in Switzerland, have suffered recently because of currency fluctuations between the Swiss franc, Euro and US dollar. "The bad news for banks like us with a big portion of costs being booked in Swiss francs, is you lose out on the currency situation. The revenues are in Euro and USD, but the currency has changed against the Swiss franc of late, so margins have been weakened. Then add this to a dull market environment and it makes people very risk-averse."

But he said that unlike its larger competitors, Falcon has the benefit of agility and can deploy capital to essential markets like the Middle East. "Compared to the bigger players in private banking, we can act much more quickly on the ground in the region. Most of the big hitting banks will see the MENA region as just another region, where internal capital allocations are competing with, for example, regions like Africa and Asia. "When it comes to investment allocation, MENA has to fit into this huge global network, which means their money or appetite may not necessarily be there. We don't have this problem," he said.

FACTS

Falcon Private Bank has 40 years of wealth management experience, with branches and representative offices in Geneva, Abu Dhabi, Dubai, Hong Kong and Singapore.

State-owned Aabar purchased Falcon from American International Group in December 2008 after the insurer was forced to sell assets to repay a US government loan that saved it from bankruptcy. International Petroleum Investment Company, an investment company wholly owned by the Government of Abu Dhabi, owns 86.16 per cent of the shares in Aabar.

Bruno Daher, Co-CEO of Credit Suisse, Middle East and head of private banking

Credit Suisse held $865 billion in global private banking assets in 2010, up 11.56 per cent on the previous year, according to the Scorpio Partnership Private Banking benchmark study. However, the Swiss financial services company, like many global banks, has experienced challenging times in 2011.

The firm is axing 2,000 jobs after revenues slumped in the face of the European debt crisis, with net income falling by 52 per cent to SFr768m ($973.4 million) for the second quarter of this year. The steady fall in the value of the US dollar against the Swiss franc has also hurt the Zurich-based bank.

Having set up its presence in the region more than 40 years ago, Credit Suisse has long known the potential of Middle East investors and is well placed to benefit from the growing wealth of local UHNWs. Bruno Daher, co-CEO and head of private banking for the region, has his sights set on increasing the Middle East's share of the pie.

"Private banking has been very active in the region for a very long time; the difference now is that in light of current challenges in mature markets there is renewed wealth creation in China, India, MENA and emerging markets in general. In all these locations, wealth management will thrive," he says.

"Credit Suisse has always considered MENA to be among its priority markets. UHNW is a fast-growing segment, accounting for about one third of our assets under management in our wealth management business globally."

Daher says that private banking is not just about products, which have now become commodities, but wealth management is about relationships, premium advice and client management. Integrated offerings and cross-pollination between investment banking, asset management and private banking arms also offer the client more value in today's headwinds. Credit Suisse is currently taking measures to forge stronger relations between all of three of its arms in the region.

But, along with the tools, you also need the talent, says Daher: "The MENA region now has more talent than ever before, making it a highly active, successful market. We have hired and trained people over the years which helps to grow the talent pool. An ability to attract and retain people is fundamental to our long-term success."

Daher adds that it's easier to recruit in Dubai than the rest of the Gulf as the emirate offers a practical hub for bankers with easy flight connections, quality schools, housing and medical infrastructure.

Credit Suisse is taking action globally to reduce its cost base, but these cuts will not necessarily make their way to the Middle East as Daher builds up his team. "We are taking action to adjust our cost base and are seeking cost efficiencies across the bank in order to ensure attractive returns," he says. "We continue to be proactive about monitoring the size of our business relative to client opportunities and market conditions. This involves realigning resources to growth areas."

Daher believes the way to combat the extreme levels of uncertainty from markets is to stay close your customers because, in today's climate, clients are becoming increasingly jittery and, in some cases, more knowledgeable, with increasingly sophisticated financial requirements.

"To maintain strong relationships, you need to be able to partner clients with experienced advisors who can help them to achieve their aspirations. The markets are complex. Clearly, we are facing a challenging economic and market environment and I believe that it's going to be a difficult year all round."

FACTS

Founded in 1856, Credit Suisse Group AG is a Swiss multinational financial services company headquartered in Zurich, with more than 250 branches in Switzerland and operations in more than 50 countries. The company operates in three segments: private banking, investment banking, and asset management. The private banking segment offers advisory services and a range of wealth management solutions, including pension planning, life insurance products, tax planning, and wealth and inheritance advice for UHNWs.

Jawdat al-Halabi, CEO of NCB Capital

Saudi Arabia is leading a dramatic rise in demand for Islamic private banking despite the regional turmoil, according to the Middle East's largest wealth manager NCB Capital . The Riyadh-based bank, which manages $14.9 billion in assets, dominates regional Islamic finance due to Saudi's abundance of super-rich Shari'ah investors.

Demand from wealthy Muslims in the country has soared since the recession, according to Jawdat al-Halabi, CEO of NCB Capital , but surprisingly has remained strong even through the tumultuous first half of the year.

"The financial crisis hit Islamic banking, but not as hard as conventional banking. This spurred interest from clients for Shari'ah compliant investment. Since the start of 2011, clients have looked for value and growth and better returns than they've seen in the past. Whereas they were previously sitting on the sidelines post-crisis, they are now becoming more demanding," said al-Halabi.

The firm offers conventional banking services, but 95 per cent of its asset management business is in Islamic products.

High net worth individuals in Saudi have been eagerly awaiting the government's public spending package, which is likely to stimulate widespread economic activity.

The kingdom has over $92 billion in Shari'ah financial assets and is the largest Islamic banking player in the world in terms of fund volume. Global Shari'ah compliant assets are estimated to have crossed $1 trillion in 2010, growing at a sustainable 15-30 per cent per annum. Al-Halabi is confident that despite fresh competition from international private banks that have moved into Saudi, NCB Capital will continue to strengthen.

"International wealth management players have small offices in Saudi and don't put people on the ground. They use it as a window to collect money and Dubai as a hub through which to invest. This limits their local Saudi knowledge. There's always been a high number of players in Saudi. The 11 domestic banks have always been into wealth management. Although the volume of participants is quite big, the size of the market can sustain that."

He added that some international institutions in the past have operated as "suitcase bankers" in Saudi and have done so without a licence, which some say is illegal. "Because of recent regulations, which tightened the rules around registration, more bankers are formalising their presence and becoming regulated businesses. So the competition hasn't changed much, it's just become more visible."

As demand for Shari'ah investment spikes, NCB Capital is set to roll out a 12-month campaign of Islamic funds. Al-Halabi is planning to launch four funds over the coming year that will invest in Saudi real estate, equities and small - to medium-sized businesses (SMEs).

The proposed SME fund will be structured as an Islamic private equity product, targeting wealthy family offices. The bank is also in the final stages of a tie-up with an international asset manager to expand its global equity offering.

"The bulk of our clients invest nationally and regionally," said Al-Halabi. "Most of the Saudi investors that want international exposure separate their onshore and international investment and so do it with international banks. On the domestic side, Saudi domiciled banks are better than international players because of their on-the-ground presence, closeness to the clients and accessibility to the market," he added.

NCB Capital 's strength in Islamic fund management is typified by its AlAhli Saudi Riyal Trade Fund. With assets under management at a record SAR16.5 Billion ($4.4 billion) and more than 17,000 clients as of December 2010, it is the largest Shariah-compliant fund in the world.

More broadly, the firm has grown its assets under management by 23.46 per cent since January 2010, adding SAR6.8 billion which represents 95 per cent of the total market's growth last year and today it has a 36 per cent share of Saudi mutual funds.

Given the bank's influence in the Saudi market, its ambitious expansion
is likely to unsettle rival private banks that attempt to increase their presence
in the Kingdom.

FACTS

The National Commercial Bank , also known as AlAhli Bank, owns 90.424 per cent of NCB Capital . NCB is the first Saudi Arabian bank, the largest bank by asset in the Arab world, and one of the pioneers in Islamic banking and finance in the world.

NCB Capital is also Saudi's largest investment bank and wealth manager. Its AlAhli Saudi Riyal Trade Fund is the largest Shariah-compliant fund in the world, with assets under management of SAR16.5 billion ($4.4 billion).

© Gulf Business 2011