61 private banks serve the region, targeting high-net-worth individuals or mass affluent customers, but rarely both
The marketplace is fragmented, competitive and opaque, and will remain so
The number of personnel in the region is perhaps the most useful metric - and varies widely
There are clear reasons why some private banks will reconsider their commitment to the region
All international private banks have a base in Dubai
The GCC market for private banking services is complex, fragmented and opaque, according to a recent study by Insight discovery. The study also revealed that with 61 private banks currently present in the Gulf Cooperation Council (GCC) countries, the sector is also extremely competitive. 30 international private banks, with headquarters in Europe or North America, have offices in Dubai. The regional/local organisations have an office in at least one of the GCC countries. Each of these private banks perceives that the number and aggregate wealth of the region's high-net-worth individuals (HNWIs) presents an opportunity.
The report examines the number of private bankers that each organisation employs on the ground in the GCC which ranges from 1 or 2 to well over 50. The number of personnel in situ is perhaps the most useful indicator of activity and strategy. There are clear reasons why the private banks will likely remain secretive about the size of the assets under management (AUM) that they have raised from the region.
A number of private banks have pulled out of the GCC but there have also been new entrants into the marketplace with Nedbank Private Wealth and Arbuthnot Latham the latest arrivals.
Commenting on the report, Nigel Sillitoe, CEO of Insight Discovery, said:
"We are emphatically not the first researchers to look at the GCC's private banking sector. We are, though, probably the first to ask this question: "who are the region's 61 private banks?' Although the industry is notoriously opaque, it is still possible to gain clear insights into the trends that matter. There are undoubtedly opportunities for players with the correct strategies and ability to execute. However, there are also challenges - specific to the region - which will likely persist indefinitely. These are the issues that we examine.'
He continues:"We agree with the general consensus that private banking is developing more rapidly in the GCC than in established markets such as Europe and North America. Moreover, it is clear that Dubai has emerged as the regional hub for the provision of private banking (and related) services to HNWIs. For a number of valid reasons, many of the private banks serve their clients in the GCC region through their offices in other international financial centres (IFCs). Therefore, it will be interesting to see how Dubai and the other centres in the GCC region, which have ambitions in private banking, evolve over time."
Additional findings:
- Much of the business handled by the private banks for GCC clients is booked through IFCs that are remote from the region - but very rarely in London, New York or Hong Kong.
- It is possible to identify at least five international private banks which have closed, or sold, their businesses in the GCC in the last few years.
- About three quarters of the private banks operating in the region have minimum account sizes of US$1 million or more.
- About one quarter of the private banks operating in the region are targeting clients from Saudi Arabia or the Levant.
- It appears that only two private banks of the 61 employ more than 50 private bankers in the region.
This new report is a supplement to the research that was carried out for the Middle East Investment Panorama, now in its fourth year and which will be released later this month.
The full supplemental report can be purchased by registering at www.insight-discovery.com
-Ends-
About Insight Discovery
Founded in 2007, Insight Discovery is a strategic research company which specialises in stakeholder engagement and leadership insights. Existing clients are mainly from the financial services sector and include regional banks, investment banks, asset management companies, insurance companies and private equity companies.
Insight Discovery is behind the Middle East Investment Panorama report, the definitive guide to financial services in MENA. Since 2011, Insight Discovery has published five Leadership Roundtable reports, covering topical subjects such as Beyond the End of Service Benefit and The Role of Women in the Financial Services Sector.
Insight Discovery adheres to ESOMAR's code of conduct (the international organisation of market researchers). Insight Discovery works closely with Universal Copywriters, a consultancy that works with global investment managers, private banks, institutional banks and publishers of corporate intelligence.
During 2012 Insight Discovery was recognised as one of the top 50 service providers within the Middle East by MENA Fund Manager.
For more information, please visit www.insight-discovery.com.
For more information, please contact:
Nigel Sillitoe
CEO
Insight Discovery
sillitoe@insight-discovery.com
+971 4 313 2811
Manash Bhuyan / Martine Silve
FTI Consulting
manash.bhuyan@fticonsulting.com / martine.silve@fticonsulting.com
+971 4 437 2100
© Press Release 2013
