Sector is fragmented and opaque, says CEO of Insight Discovery
A study by Insight Discovery reveals that although there are 61 private banks in GCC countries, the sector is extremely competitive. Thirty international private banks, with headquarters in Europe or North America, have offices in Dubai. The regional organisations have an office in at least one of the countries in the GCC region. Each of these private banks perceives that the number and aggregate wealth of the region’s high-net-worth individuals (HNWIs) present an opportunity.
The report examines the number of private bankers that each organisation employs on the ground in the GCC region, which ranges from one or two to more than 50. The number of personnel in the company is perhaps the most useful indicator of activity and strategy. There are clear reasons why private banks 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 region, but there have also been new entrants into the marketplace, such as Nedbank Private Wealth and Arbuthnot Latham.
“We are emphatically not the first researchers to look at the GCC region’s private banking sector. We are probably the first to ask this question: ‘Who are the region’s 61 private banks?’,” says Nigel Sillitoe, CEO of Insight Discovery. “Although the industry is notoriously opaque, it is still possible to gain clear insights into the trends that matter. There are opportunities for players with the correct strategies and ability to execute. However, there are also challenges – specific to the region – which will more likely persist indefinitely. These are the issues that we examine.
“We agree with the general consensus that private banking is developing more rapidly in the GCC region 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. Therefore, it will be interesting to see how Dubai and the other centres across the region, which have ambitions in private banking, evolve over time.”
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