Saxo Bank, the Danish lender best known for online trading, said it plans to open an office in Abu Dhabi this summer to meet demand from local investors keen to diversify into global markets after a bumper year for UAE stocks in 2013.
The Copenhagen-based firm, which gets 10 per cent of its revenues from the Middle East, is also hoping that the Abu Dhabi office will help it in its efforts to sell its proprietary trading platforms to banks, the chief executive Lars Seier Christensen said. Saxo has had an office in Dubai’s International Financial Centre since 2009 and its presence there has helped to double the bank’s revenues in the region, he said.
“We are constantly looking to expand our network of partners here,” he said. “It’s a partnership, not a franchise, as it’s based on us delivering all the infrastructure and all the liquidity and we share the revenues. Globally the partnerships account for 20 to 30 per cent of our revenues and we haven’t been at that level here.”
In an effort to tailor its products here to a local audience, the bank will be offering a multi-asset trading platform in Arabic with Sharia-compliant investments. “We have a Sharia-compliant version of the platform where we have tailored it to this region so you can only trade in commodities and products that meet the tenets of Sharia law,” Mr Christensen said. “I’m not sure it has been hugely successful so far. Maybe one of the new partners will push it more.”
The boom in local markets has helped to boost Saxo Bank’s revenues as investors booked profits and diversified their portfolios away from regional markets where some stock indexes, such as the Dubai Financial Market General Index, have more than doubled. Saxo’s predominantly online business model is not regarded as a factor that could inhibit its growth in a region that places a premium on personal relationships.
“Online banking is not an impediment to developing a client relationship,” says Peter Cooper, the editor of Arabian Money, an investment website. “It is still nice to have a human face that can patiently deal with a customer who is to blame for the problem rather than the technology. People don’t change even if the technology does and banking is still a people business.”
ascott@thenational.ae