Emirates NBD PJSC, the United Arab Emirates’ biggest bank, is aiming for annual profit growth of at least 10 percent at its wealth management business after earnings at the unit tripled during the past two years.
The Dubai government-owned lender is targeting clients in its home market, Saudi Arabia and Qatar as well as wealthy Indian and Pakistani expatriates, Michael Chahine, the acting general manager of private banking, said yesterday in a Dubai interview. Profit from wealth management accounted for about 12 percent of the bank’s 3.26 billion dirhams ($887 million) net income last year, as assets under management and earnings rose.
The number of millionaires in the Middle East, which includes oil producers Saudi Arabia, U.A.E. and Kuwait, gained 8.1 percent in 2012 from a year earlier, according to data from Capgemini SA and RBC Wealth Management. Emirates NBD’s sees Credit Suisse Group AG. and HSBC Holdings Plc. as its biggest private-banking competitors in the region, Chahine said.
Emirates NBD’s wealth management division, which includes its asset management and brokerage units, employs 200 people, up from about 50 in 2007, he said. Money managed by the asset management unit surged 43 percent last year to $2.1 billion, according to a Dec. 4 presentation from the bank.
Coutts & Co. Ltd., the wealth management unit of Royal Bank of Scotland Group Plc, hired three bankers from Deutsche Bank AG last year to expand in the region while Julius Baer Group Ltd., Switzerland’s third-largest wealth manager, acquired Merrill Lynch’s businesses in Lebanon, Bahrain and the U.A.E.
Individuals in the Gulf Cooperation Council with investable wealth of more than $1 million hold a combined $1.3 trillion in assets, with that amount growing by 12 percent a year, Chahine said, citing data from McKinsey and Boston Consulting Group. Half that wealth is located in Saudi Arabia, he said.
Clients are increasingly seeking to invest in shares after focusing mainly on fixed-income and real-estate over the past five years, Chahine said. They’re also interested to co-invest in real-estate and private-equity deals, he said.
“After the 2008 crisis, private banking clients shifted allegiance from their traditional private banks to independent advisors and we benefited from that,” Chahine said.