DBS plans to expand in the Middle East, homing in on a growing wealth segment that looks towards Asia for investment opportunities, the bank said on Tuesday.
It 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. South-east Asia's biggest bank intends to double the number of private bankers in Dubai over the next five years, from more than 20 now, a DBS spokeswoman said. Total Dubai branch headcount currently is more than 40.
DBS has expanded its office premises located at the heart of Dubai's financial hub, DIFC.
Over the past seven years, total revenue of DBS' Dubai branch has grown 20 per cent per annum, 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," DBS said.
DBS is the 6th largest private bank in Asia in terms of assets under management as ranked by Asian Private Banker.
DBS' Middle East aspirations follows that of its rival Bank of Singapore (BOS), the private bank unit of OCBC Bank. Last December BOS which is the 8th largest private bank in Asia said that it would add more staff to Dubai as it tries to capture more business from the Middle East's wealthy and rich Indians living overseas, according to a Bloomberg report.
It said then the plan was to hire about 20 relationship managers in 2018 to cater to non-resident Indians (NRI) and rich people in the Arab world. Vikram Malhotra, the bank's global market head for South Asia and the Middle East, 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 non-resident Indian teams in those cities.
BOS opened its Dubai branch in February 2017 and has about 45 wealth managers in the city.
Asked for an update, Mr Malhotra told The Business Times on Tuesday that as of 30 Sep 2018, BOS' revenue from this region has grown on 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.
As part of its extended offering, DBS said it is building a bespoke investment portfolio including private equity funds within growth segments such as e-commerce, health technology, real estate, logistics and fintech across growing Asian markets; structured products in key segments for China and India; dual currency loans; and real estate investment trust (Reit) initial public offerings with underlying assets in Europe and North America.
Tan Su Shan, DBS group head of wealth management and consumer banking, said the UAE and Singapore are strongly linked by their shared values of innovation, technological progress and visionary thinking, making Dubai a natural choice for a regional hub.
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 in 2017, to approximately 500 in 2022, said Ms Tan.
"With Middle East client appetite for Asia wealth solutions growing, DBS is well-positioned to support our Middle East clients in accessing Asia's growth opportunities through our strong Asian network, innovative investment solutions and world-class digital capabilities," she said.
As part of its expansion plan, DBS also announced the appointment of Rudiger von Wedel as head of international, DBS Private Bank, effective Nov 19, 2018.
Based in Dubai, he takes over from Rob Ioannou, who will be moving on to lead DBS' wealth, trust and estate planning business, as well as build up DBS' single family office offering and Australian desk. Mr von Wedel was most recently chief executive of the global wealth division of the National Bank of Abu Dhabi .
Established in March 2006, DBS' Dubai branch was the first Singapore-based bank to receive a banking licence at the DIFC.
This is not the first time that DBS has tried to expand in the Middle East.
In 2007, DBS had set up the Islamic Bank of Asia (IB Asia), investing US$250 million in Singapore's first Islamic bank. It was joined by 22 co-investors from prominent families and industrial groups from Gulf Cooperation Council countries, such as Qatar, Saudi Arabia and the UAE.
But IB Asia was closed in 2015 as it could not achieve economies of scale, DBS said then.