Emirates NBD, Dubai’s biggest bank by assets, is looking to expand its presence in Saudi Arabia and plans to approach the banking regulator in the Arab world’s biggest economy next year to seek permission for 20 additional branches in the kingdom.
The lender is also on the lookout for acquisitions of banking assets in the GCC, Africa and Turkey as part of its growth agenda, its group chief executive said.
Emirates NBD, which received the permission for three branches in Jeddah, Khobar and Riyadh earlier this year, plans to open them in the first quarter of 2018 and only then will approach the regulator, Saudi Arabian Monetary Authority (Sama), for additional licences.
"We will knock on their door once we have actually done that [branch openings]," Shayne Nelson, who has been at the helm of the Emirates NBD for more than four years, told The National. "We can certainly open a couple of dozen branches within the next three to five years if we get the licences. I think we would be very happy with that number."
Emirates NBD was the first non-Saudi bank that was allowed to increase its branch network in Saudi Arabia. Mr Nelson said that despite current softer economic conditions, the kingdom is the place to be and grow into.
“It’s a terrific economy,” he said, adding that Emirates NBD does not want to open too many branches in the kingdom as technology is going to limit the requirements of a very large branch network in the future.
“I don’t think we are going to need 100 branches,” he said, adding that the eventual size of Emirate NBD’s branch network will be the subject to the regulator’s approval, and "four branches for the geography of Saudi Arabia are not enough ... we would love to have more”.
The lender, which had only one branch in the capital Riyadh before securing permission for three more, has chased Sama for a decade to expand in the country. Once the regulator sees Emirate NBD's success with the new branches, it might be inclined to issue more licences, said Mr Nelson.
“To be fair, Saudi authorities would like to see us get these [branches] opened, get them staffed up and start getting successful, [and then] they will be quite open,” he explained. The strong relationship between Saudi Arabia and the UAE, the region’s second biggest economy, could also help in paving the way for Emirate’s NBD’s Saudi growth plans, he noted.
The bank, which bought BNP Paribas' Egyptian unit about five years ago, is looking for further acquisition opportunities within East and North African markets, the broader Arabian Gulf region and Turkey, Mr Nelson said.
“That’s the geographic spread. Why those markets? Because we believe it’s important to be in the markets where the UAE has a strong relationship and strong capital and trade flows, he said adding that the bank intends to remain “relevant to its customers” and wants to expand where the customers are expanding.
_______________
Read more:
Emirates NBD plans more success out of Africa
Profitability to remain resilient for top UAE lenders
_______________
The hydrocarbon-dependent economies of the GCC, a region that accounts for about a third of the world's proven oil reserves, slowed in the past two years after the price of crude fell from its mid-2014 peak, causing credit demand to decline, problem loans to rise and put assets quality in the banking system under pressure. Regional banks have been looking to expand beyond their borders or have explored domestic merger and acquisition opportunities to increase their balance sheets and cope better with a tougher operating environment.
Earlier this year, Abu Dhabi’s First Gulf Bank and National Bank of Abu Dhabi merged to form First Abu Dhabi Bank, one of the top Middle Eastern lenders by assets.
Mr Nelson declined to say if Emirates NBD already has a deal on the table. “We continue to look at multiple targets,” he said.
The lender, which boasts a capital adequacy ratio of more than 20 per cent, has waited a long time for the Egyptian acquisition and is willing to wait further for the right opportunity to come its way.
"It is no secret that we have been looking for quite some time. Every investment bank in the world knows we have surplus capital so we get every idea they can come up with for us to spend money," Mr Nelson said. However, the bank is cautious as "there is no better way of destroying value for shareholders than to make the wrong acquisitions, he added.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Sunday's games
All times UAE:
Tottenham Hotspur v Crystal Palace, 4pm
Manchester City v Arsenal, 6.15pm
Everton v Watford, 8.30pm
Chelsea v Manchester United, 8.30pm
The five pillars of Islam
If you go...
Etihad Airways flies from Abu Dhabi to Kuala Lumpur, from about Dh3,600. Air Asia currently flies from Kuala Lumpur to Terengganu, with Berjaya Hotels & Resorts planning to launch direct chartered flights to Redang Island in the near future. Rooms at The Taaras Beach and Spa Resort start from 680RM (Dh597).
The%20specs
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%203.0-litre%20six-cylinder%20turbo%20(BMW%20B58)%3Cbr%3E%3Cstrong%3EPower%3A%3C%2Fstrong%3E%20340hp%20at%206%2C500rpm%3Cbr%3E%3Cstrong%3ETorque%3A%3C%2Fstrong%3E%20500Nm%20from%201%2C600-4%2C500rpm%3Cbr%3E%3Cstrong%3ETransmission%3A%3C%2Fstrong%3E%20ZF%208-speed%20auto%3Cbr%3E%3Cstrong%3E0-100kph%3A%3C%2Fstrong%3E%204.2sec%3Cbr%3E%3Cstrong%3ETop%20speed%3A%3C%2Fstrong%3E%20267kph%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EOn%20sale%3A%3C%2Fstrong%3E%20Now%3Cbr%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20From%20Dh462%2C189%3Cbr%3E%3Cstrong%3EWarranty%3A%3C%2Fstrong%3E%2030-month%2F48%2C000k%3C%2Fp%3E%0A
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
Brief scores:
Manchester City 3
Bernardo Silva 16', Sterling 57', Gundogan 79'
Bournemouth 1
Wilson 44'
Man of the match: Leroy Sane (Manchester City)
Queen
Nicki Minaj
(Young Money/Cash Money)
