There are 61 private banks currently present in the GCC region, including 30 international ones, according to a new study by Insight discovery. All the international private banks are based in Dubai, found the study.
“The GCC market for private banking services is complex, fragmented and opaque,” it said.
A number of private banks such as Clariden Leu, Llyods TSB, Merrill Lynch, Morgan Stanley, Pictet and Vontobel have pulled out of the GCC either by selling their businesses or closing down in the last few years.
But the market has also seen new entrants such as LGT, Nedbank Private Wealth and Arbuthnot Latham, said the report.
“A number of private banks who establish a physical presence in the GCC region are unable to achieve the commercial results that they had anticipated. It is not uncommon for private banks to close local operations after only a short period. The competitive landscape will remain a fluid one for some time to come,” it stated.
The study also found that about three quarters of the private banks operating in the region have minimum account sizes of $1 million or more.
The Middle East had around half a million HWNIs (out of 12 million globally) in 2012, who, collectively, had investable wealth of $1.8 trillion (out of $46.2 trillion globally), according to the latest ‘World Wealth Report’ from Capgemini and RBC Wealth Management.
These numbers were, respectively, 8.1 per cent and 8.6 per cent higher as compared to 2011.
Nigel Sillitoe, CEO of Insight Discovery, said: “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.”
The study also found that 24 out of the 61 banks are targeting non-resident Indians (NRIs) and non-resident Pakistanis (NRPs), while around a quarter are eyeing clients from Saudi Arabia or the Levant.
In terms of staff, numbers vary from one or two to over 50. However, only two private banks of the 61 employ more than 50 private bankers in the region, added the report.