The net worth of wealthy customers in the UAE as well as in the Middle East, in general, is linked to oil price. And as long as oil and energy prices remain high, the assets of high net worth individuals (HNWIs) in the Middle East is expected to continue rising, a top official of Saxo Bank Dubai, the Copenhagen-based online trading and investment bank, has said.
"In the case of the UAE, a number of HNWIs have had exposure to the real estate market, which have impacted their net worth last year. However, in view of the fact that the UAE and Dubai have one of the highest concentrations of HNWIs in the world, we expect the trend to continue depending on the property market recovery and oil price going forward," Jakob Thomsen, CEO of Saxo Bank Dubai, told Emirates Business.
The UAE-based clients alone constitute almost one-third for the bank, in the entire Middle East, and the number of the bank's clients in Dubai has jumped significantly in a year, he said.
"The UAE-based clients constitute almost 30 per cent of our total number of clients in the [Middle East] region. We have also seen the ratio of clients from Dubai increasing significantly over a period of one year. Dubai is now one of our biggest markets in the Middle East," said Thomsen.
The bank, with Dubai being its sole office in the entire Middle East, completed one year of its operation in the region on April 1. He said the bank has also seen its assets under management in the Middle East having doubled in its first year of operation in the region.
"Looking back, it has been a steep learning curve for us but we have managed to post good growth both in terms of assets under management as well as winning new clients. Within a year, we have doubled our clients' assets under management in the Middle East, posting almost 100 per cent growth making the region one of the fastest-growing markets for Saxo bank," he said.
The bank does not offer retail banking in Dubai, rather its private institutional clients (that constitutes mainly HNWIs) open accounts with the bank to trade in global markets in different asset classes ranging from global equities, commodities, to forex, CFDs on stocks as well as commodities, global futures market, etc, he said.
He said the bank is also eyeing opportunities to expand in other GCC countries.
"We are looking at opportunities in other GCC countries and planning to expand in countries such as Bahrain and Qatar. Saudi Arabia could also be a possibility in the future. We have yet to start getting regulatory approvals for opening our offices in other countries of the region because we believe the region will have an important role to play in the future," he said.
Asked what are the services the bank will be offering once it starts operating in other markets, he said: "We would like to have a more institutional partner-focused business model in new markets in the region. However, we will continue to offer products for our individual clients."