Private wealth in the UAE has grown at the fastest pace among Arabian Gulf states in the past four years, according to a study by the consultants Strategy&.
While wealth in the region grew at an average of 17.5 per cent a year from 2010 to 2014, doubling to US$2.2 trillion from $1.1tn, the UAE’s wealth increased at an annual growth rate of 25 per cent.
The UAE’s share of the region’s wealth increased to 30 per cent from 24 per cent between 2009 and 2013, the report said.
That overall growth “is partly owing to the global rebound in equities and partly thanks to GCC-specific drivers, particularly the impact of high oil prices during that period, as well as increasing government spending on megaprojects, infrastructure, further economic diversification and job creation,” said Daniel Diemers and Jihad Khalil, the authors of the report.
Almost half of the GCC’s wealth resides in Saudi Arabia and together with the UAE the two countries controlled 74 per cent of the region’s wealth in 2013, compared with 71 per cent in 2009.
Private banks have been boosting their businesses in this part of the world to take advantage of the growing wealth. In the past two years a number of private banks including Swissquote and La Cloche Wealth Management have set up in the Dubai International Financial Centre.
Falcon Private Bank, a Swiss money manager owned by Abu Dhabi, has been beefing up its capabilities locally while shutting offices in Hong Kong to focus on the super-rich in the Middle East, Africa and eastern Europe.
Emirates Investment Bank, a UAE private bank, has seen its assets under management more than double in the past two years.
In all, over 60 private banks operate in the region. Most are based in Dubai.
“The expansion of wealth has encouraged more local GCC players to enter the private banking market,” the report said.
“Meanwhile, global banks are joining the fray in search of opportunities to offset relatively slow growth in their home markets. These global and local players are being joined by other mid-market entrants from traditional safe offshore havens.”
Definitions of wealthy, so-called high net worth individuals and ultra high worth individuals vary but according to Strategy&, they are those who have at least $200,000, $1 million and $50m, respectively, in investible assets.
The consultancy said it had found that the wealthy segment had grown at the fastest pace in the GCC, advancing 21 per cent a year from 2009 to 2013 as their combined pot ballooned to $560bn from $261bn.
mkassem@thenational.ae
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