BNP Paribas, number one banking group in the euro zone, announced plans to reinforce its presence in the GCC and the neighbouring markets, by strengthening its private banking and asset management services as part of a major Middle East foray.
Announcing this at a press conference today (14th December 2005) in Dubai, François Debiesse, Director of BNP Paribas Private Bank and Chairman of the Foundation BNP Paribas, said: “A series of private banking units have started operations in our already existing branches as we move our staff closer to the region in order to strengthen our activities. In the near future, this region will see more than 45 specialist staff offering asset management services to high net-worth individuals.”
Mr. Debiesse noted that the move forms part of an initiative to create proximity with local clients by providing dedicated private banking teams in each branch in the Middle East including Bahrain, Abu Dhabi, Dubai, Kuwait, Qatar, Saudi Arabia and Lebanon.
These specialists will be able to offer expert advice on offshore and onshore investment opportunities. The strategy of proximity to local markets has been the key reason for BNP Paribas to achieve international rankings including top positions in areas such as project finance, local capital markets, Islamic products and trade finance.
“Besides our Bahrain, Abu Dhabi, Dubai, and Doha branches in the Gulf, we have also launched private banking operations in Riyadh and Kuwait City,” said Jean-Jacques Santini, Head of International Retail Banking in Emerging Markets and Overseas added.
The bank aims to double its Assets Under Management (AUM) in private banking business from US$ 5 billion to US$ 10 billion within 3 years in the GCC region and Lebanon pointed out Mr. Debiesse. More than 10% of BNP Paribas private banking’ international off shore business is already generated from this region.
With the Arab countries estimated to earn more than $280 billion in 2005 in oil revenues alone, the need for private banking and offshore banking services for wealth management from high net worth individuals and institutions are set to increase in the region.
Being a globally recognised and multifaceted banking operator, BNP Paribas is better positioned to offer quality offshore and onshore banking services.
Locally and regionally with its well-established presence over the years, the bank is currently contemplating investment products suitable to clients. In order to consolidate its private banking activities, BNP Paribas has entered into local partnerships for developing appropriate region-specific instruments.
The recent spurt in economic growth following continued up trend in oil prices point towards an increased need for wealth management services. While there has been a significant rise in investor assets locally and regionally in recent years, a leading global financial services group such as BNP Paribas, ranked number one banking group in the Euro zone in terms of net income, has the global expertise and better investment products to offer its clients.
The bank is entering the scene at the right time. Saudi Arabia and Kuwait are opening up the sector, which will enable banks like BNP Paribas to service the needs of corporate and individual clients. The bank already has an Offshore Banking Unit in Bahrain to provide structured finance and investment banking services in the Middle East. A representative office in Bahrain currently ensures an extensive coverage of the regional financial institutions and providing access to the group's expertise in fields such as asset management and structured investment products.
BNP Paribas’ expansion in the GCC region and Lebanon comes as part of its strategic expansion plan in the neighbouring region and Asia. The bank plans to have a total of 381 branches in the Mediterranean Basin and the Gulf region and 58 in China.
Total assets under management at BNP Paribas’ Asset Management and Services division, which includes Private Banking, reached AED1.8 trillion (414.6 billion euros) at the end of September 2005, up 22 percent from the year-earlier period. In terms of revenues, they rose 16% to 870 million euro for the third quarter of this year.