CS's Private Banking to Expand in Middle East
Iqbal Khan, CEO of International Wealth Management (IWM), told Bloomberg TV he expects the Middle East to account for a significant part of private banking's growth as the number of wealthy individuals in the region increases.
Khan said IWM expected to expand in the Middle East, as millionaires in the region rise to 500,000 from about 330,000, including seeking to secure an onshore banking license for Saudi Arabia. During an interview with Bloomberg television in Dubai, Khan listed the United Arab Emirates, Saudi Arabia and Kuwait as the most promising markets in the Middle East.
"We're growing our coverage base across international wealth management and a material part of that is going to be in the Middle East," Khan told Bloomberg TV, adding that the bank is deploying capital in the region through initiatives to better service clients and had hired 45 relationship managers across the Middle East last year.
Khan said the bank's application for a Saudi Arabian banking license was part of its plan to expand in the kingdom.
"The Middle East is going through a trough in the short term but we're bullish in the long term," he said. Credit Suisse currently manages about CHF 70 billion of private banking assets in the region, with assets growing "double digits" in the first half, Khan added.
"In emerging markets the wealth pool is about CHF4 trillion and that is expected to grow to about CHF7 trillion by about 2020-21," he explained.
When asked about the changing profile of clients in the Middle East, Khan stressed that the young entrepreneurial spirit present in the region is in line with the heritage of Credit Suisse: "We were founded by an entrepreneur and we want to support the entrepreneurial segment across the life cycle."
In emerging markets the wealth pool is about CHF4 trillion and that is expected to grow to about CHF7 trillion by about 2020-21
Exceeding Market Growth Rates
Credit Suisse's IWM division, driving the bank's new strategy to strengthen its position as a leading private bank and wealth manager, has had a strong first half of 2016, exceeding market growth rates.
"Our first half was very successful as we raised about CHF11 billion of net new assets, which is a 7-8 percent annualized growth rate and exceeding market growth rates," Khan said in the exclusive interview.
"In the first half, we focused a lot more on increasing share of wallet from existing clients. Out of our CHF11 billion in new assets, more than 50 percent came from existing clients. That was the same in the Middle East."
Credit Suisse's International Wealth Management division serves private and institutional clients in Europe, Latin America, the Middle East and Africa, and includes the bank's global Asset Management franchise.
"Our emerging markets businesses grew by 9 percent and in Europe we grew by 7 percent, while the European market has been growing at a much lower rate", Khan said, adding that in the first half of this year, on an adjusted basis, IWM grew by 5 percent while the market was down 10-15 percent.