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Singapore private banks target Middle East, NRI clients

DBS' Tan Su Shan says wealth in the Middle East is rising, with individuals holding more than US$500m in assets to go up by 28% between 2017 and 2022.


SINGAPORE'S private banks are stepping up efforts to capture new clients in the Middle East market, which includes a significant non-resident Indian (NRI) segment.

India has the largest diaspora population in the world, with as many as 16 million Indians living outside the country of their birth, says the United Nations report on migration trends.

DBS Bank, Bank of Singapore and Citi are aggressively hiring more bankers in their bid to target the rich in the Middle East and these NRIs.

DBS plans to expand in the Middle East by doubling the number of private bankers there over the next five years, from more than 20 now, the bank said. It will home in on a growing wealth segment that looks towards Asia for investment opportunities, the bank said last month.

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South-east Asia's biggest bank - also Asia's sixth biggest private bank by assets under management - will make its Dubai office a strategic hub for the Middle East, positioning itself as the partner of choice for clients wishing to access the Asian market.

DBS has expanded its office premises located at the heart of Dubai's financial hub, DIFC. Over the past seven years, total revenue of this branch has grown 20 per cent a year, it said.

Targeting the region's growing presence of ultra-high net worth (UHNW) and high net worth individuals, family offices and sovereign wealth funds, the bank also aims to triple its revenue over the next five years by focusing on increasing client diversity, spread and penetration, it said.

DBS' Middle East strategy includes targeting the NRI business, the bank's spokesman said.

Tan Su Shan, its group head of wealth management and consumer banking, noted the tremendous wealth of Middle East clients and their growing appetite for Asian investments.

Wealth in the Middle East remains on the rise, with the number of UHNW clients with more than US$500 million in assets in this region projected to increase by 28 per cent - from 390 last year to approximately 500 in 2022, she said.

"With Middle East clients' appetite for Asia wealth solutions growing, DBS is well-positioned to support its Middle East clients in accessing Asia's growth opportunities through its strong Asian network, innovative investment solutions and world-class digital capabilities," she said.

Bank of Singapore (BOS), the private bank arm of OCBC Bank, has also been growing its Dubai operations to clinch more Middle East and NRI clients.

Vikram Malhotra, BOS global market head for South Asia and the Middle East, said that as of Sept 30, the bank's revenue from the region has grown 20 per cent on a year-on-year basis - with a good mix of Arab and NRI clients. "We continue to hire strategically to expand our operations in our DIFC branch," he said.

BOS opened its Dubai branch in February 2017 and has about 45 wealth managers in the city.

A year ago, the bank - Asia's eighth largest private bank - said the plan was to hire about 20 relationship managers this year to cater to NRI and rich people in the Arab world.

Mr Malhotra said most of the additions will be based in Dubai, though some will be located in Singapore and Hong Kong to bolster the bank's NRI teams in those cities.

This month, Citi Private Bank said it is eyeing a bigger chunk of Indian wealth business - globally and domestically.

The bank, the second largest private bank in Asia, expects to capture a significantly larger slice of the wealth-management business represented by the global Indian diaspora and the domestic Indian markets.

A significant proportion of the diaspora are UHNW families, concentrated in South-east Asia, Hong Kong, Australasia, the Gulf region, East Africa, the United Kingdom, the United States and Canada, said Citi.

"The mantra of globalisation is something the Indian diaspora has been practising for centuries," said Jyrki Rauhio, South Asia head for Citi Private Bank.

For many of these families, their business footprint is multinational and their investment appetite is equally eclectic, he said.

"They are investing in overseas assets such as commercial and residential real estate, and are represented by family offices and family members in locations around the world, managing the family business and investing activities locally. They are the quintessential global citizens, requiring a global private bank like ours," he said.

Citi also announced the appointment of Varun Chugh as the global market manager for the global India business, and Puneet Sanwalka as the head of India onshore business. Both report to Mr Rauhio in a two-pronged strategy to expand the private bank's India business.

Mr Chugh and Mr Rauhio are Singapore-based.

Private banks may find that their expansion ambitions will be tough going, given the industry's keen competition and poaching strategy.

Mr Chugh joined Citi from DBS Bank, where he ran its global South Asian team.

DBS said it has appointed Rudiger von Wedel as head of international in DBS Private Bank; he will be based in Dubai.

Mr von Wedel was most recently chief executive of the global wealth division of the National Bank of Abu Dhabi.

BOS' plans to add 20 relationship managers (RMs) to its Middle East and NRI teams has run up against other banks' luring existing bankers away. The net gain in RMs has been less than expected, The Business Times understands.

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