Bank of Africa teams up with Bank of Palestine to boost economic ties

Moroccan banking conglomerate Bank of Africa has teamed up with Bank of Palestine to boost economic co-operation.

The initiative aims to bolster sustainable development, financial inclusion and entrepreneurship in Palestine and Morocco, the organisations said.

The partnership allows cross-participation, on a symbolic basis, through the acquisition of shares in the stock exchanges where these banking institutions are listed, they added.

Bank of Africa is listed on the Casablanca stock exchange, in Morocco, while Bank of Palestine is listed on the Palestine Exchange, in Nablus, in the Palestinian territories.

Under the agreement, Bank of Africa is expected to acquire shares equivalent to nearly 1.2 per cent of the Bank of Palestine's capital.

The organisations also agreed to develop banking co-operation, in particular, in trade finance and correspondent banking as well as to exchange their expertise in financing SMEs and supporting entrepreneurship and innovation.

“Beyond its financial, economic and cultural scope, it is an institutional act of solidarity and confidence in the future of Palestine as well as a contribution from Bank of Africa to forge a common economic destiny between the two nations,” said Othman Benjelloun, chairman of Bank of Africa.

With a presence in 32 countries, Bank of Africa is one of the main pan-African financial groups.

The partnership is in line with Bank of Palestine’s vision of regional expansion and its aim to attract institutional investors, chairman Hashim Shawa said.

Founded in 1960, Ramallah-based Bank of Palestine has a network of 103 branches and it serves more than 900,000 customers. With total assets of $7.1 billion, it is the first national bank among 13 financial institutions operating in Palestine.

It is one of the main leaders to SMEs and a leading contributor to financial inclusion.

The latest agreement revolves around economic promotion aimed at boosting "trade and investment flows between Morocco and Palestine, as well as cultural co-operation, in particular through the realisation of joint projects highlighting the historical ties", between two economies, the organisations said.

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What is the Supreme Petroleum Council?

The Abu Dhabi Supreme Petroleum Council was established in 1988 and is the highest governing body in Abu Dhabi’s oil and gas industry. The council formulates, oversees and executes the emirate’s petroleum-related policies. It also approves the allocation of capital spending across state-owned Adnoc’s upstream, downstream and midstream operations and functions as the company’s board of directors. The SPC’s mandate is also required for auctioning oil and gas concessions in Abu Dhabi and for awarding blocks to international oil companies. The council is chaired by Sheikh Khalifa, the President and Ruler of Abu Dhabi while Sheikh Mohamed bin Zayed, Abu Dhabi’s Crown Prince and Deputy Supreme Commander of the Armed Forces, is the vice chairman.

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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.”

If you go

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The biog:

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Favourite food: Pizza

Best food on the road: rice

Favourite colour: silver

Favourite bike: Gold Wing, Honda

Favourite biking destination: Canada

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