National Bank of Abu Dhabi is seeking to expand its wealth management business in Africa and Asia, as it looks to maintain strong growth at a time when its home region is being impacted by political and economic uncertainty.
The largest lender by assets in the United Arab Emirates saw profit and revenue posted by its global wealth unit jump 61 per cent and 89 per cent year on year respectively in 2014, with revenue surpassing Dhs1 billion ($272.3 million) for the first time.
NBAD has been focusing on growing its fee-paying businesses such as wealth management in recent quarters as it aims to offset high levels of competition in traditional banking product lines in the UAE and diversify its product offering into areas previously dominated by international lenders.
But lower oil prices coupled with unrest in many parts of the Middle East have negatively-impacted equity markets so far this year, hurting investor confidence.
Our diversification strategy “should help to offset the recent challenges of weaker local markets,” Gary Dugan, NBAD’s global banking chief investment officer, told Reuters.
The wealth management strategy matches the bank’s wider aim of expanding through eight banking hubs it wants to set up in major cities from West Africa to China.
NBAD plans to introduce wealth management services for affluent Egyptians, its chief executive said last month. .
The bank plans to open in July its first office in India, in Mumbai.
“We have a love affair with India,” Dugan said of the business opportunities there.
India is also one of the markets where NBAD is looking to deploy its investors’ capital, as part of a wider weighting increase towards markets in Asia and Europe.
“In terms of our asset allocation, for developed markets we are tactically positive and overweight on Europe and Japan on a hedged basis, and in emerging markets, India is our big bet,” Dugan said, adding it was reducing its exposure to the United States, except in specific sectors including healthcare and technology.
China will not be on the bank’s radar though, given its huge debt, the defaulting on bonds by banks and other warning signs, according to Dugan.
“China has to do something big, a massive fiscal boost that could add vibrancy to Asia.”
And while equity markets are suffering, NBAD is positive on the Middle East and North Africa for fixed income, as increased issuance due to the lower oil price improves the size of the market, he added.