Exclusive: Netherlands’ ABN Amro Bank to strengthen Mena presence

Lender is hiring staff at Dubai hub and plans to acquire an equity capital market advisory licence to offer pre-IPO services

ABN Amro plans to extend presence in UAE. Stephen Lock / ADMC

ABN Amro Bank is expanding its presence in the Middle East and North Africa (Mena) region and plans to hire more staff at its Dubai hub as economic diversification drives, particularly by the oil-rich sovereigns in the GCC, open up business opportunities for the Dutch lender.

The bank plans to boost its corporate and institutional business in the Arabian Gulf and intends to obtain an equity capital markets (ECM) advisory licence to offer pre-initial public offering (IPO) services to its clients in the region, Hugo Peek, the chief executive of corporate and Institutional banking for Europe Middle East and Africa region, told The National in Dubai.

The lender, which has seen a resurgence after the financial crisis, acquisition and a break up, plus a government rescue and its re-listing in 2015, will focus on expanding business in five sectors: oil and gas together with basic materials; the transportation and logistics sector encompassing infrastructure; the food and retail sector; financial institutions; and utilities and renewables, Mr Peek said.

Global banks are increasing looking at the wider Mena, particularly the GCC region where the governments are pushing to transform their economies and cut dependence on oil revenues. Privatisation is at the heart of the economic overhaul agenda in the region with public offerings of companies such as Saudi Aramco planned next year. On the debt side, sovereigns, government-related entities and the private sector companies have all tapped the markets to shore up funds or refinance existing debts, making the region a hot spot for international banks looking to capitalise on new business opportunities both on the equity and debt sides.

ABN Amro, however, will maintain its sector-focused approach both in terms of extending financing to its clients and helping them with ECM solutions in the future.

“Despite the fact that ABN Amro is a significant bank [globally], we would be a focused player with a full service offering - but within in the dedicated sectors only,” according to Mr Peek. “We are confident about our abilities and particularly the prospects in the region,” he said, adding that the bank has enjoyed a long presence in the Middle East, which puts it in a “very good position in terms of future growth”.

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The plans to get an ECM advisory licence fits with the lender’s overall agenda for the region, he said. “For the moment it is pre-IPO and I would like to have a full-service offering in due course. It is a critical element in the evolution of our story,” he said, without indicating when the lender plans to obtain the licence.

“We used to be asset financiers but now we want to establish a more corporate style relationship with our clients, which typically also means taking the dialogue with the clients from the financial [extending financing] perspective to a strategic perspective,” he noted.

The lender has already started strengthening its presence in the region and has boosted its workforce to 25 in its Dubai International Financial Centre (DIFC) base, according to Bas Welling, the bank’s regional head of Mena, East Africa and Indian sub-continent.

“We have added [staff] this year and we are aiming to add more people during the course of 2018, he said. “This is obviously a controlled growth strategy,” he said, without specifying the number of employees that have already been hired or how many more the bank plans to add.

ABN Amro, which first set up in the UAE in 1974, is targeting large government and institutional clients to boost its corporate business, Mr Welling said.

“We have a humble approach. In principle, we will focus on the GCC. We know these countries and we have been here for a long time,” he said.

“The initiatives to further build our bank and our corporate and institutional banking business, it is a step-by-step approach.”