Bank of Singapore Targets Middle East Expansion: Aiming for 20% Revenue Growth
By Yantoultra Ngui and Xie Yu
SINGAPORE/HONG KONG (Multibagger) - Bank of Singapore, one of Asia's premier private banks, is setting its sights on the Middle East, intending to boost the region's contribution to its overall revenue and private banking assets from the current 10% to as much as 20% over the next three to five years, according to the bank's top executive.
The bank has seen a remarkable growth trajectory, with its assets under management (AUM) soaring from $20 billion in 2010 to a staggering $116 billion by the end of September 2023. Currently, the majority of this AUM is concentrated in its Singapore and Hong Kong hubs.
"Post-COVID, the UAE, particularly Dubai, has emerged as a prime destination for global millionaires," stated Ranjit Khanna, the head of private banking for Europe and the Middle East, and CEO of the Dubai hub at Bank of Singapore. "This trend is driven by positive federal government strategies, ease of doing business, robust infrastructure, and the attractive golden visa regime."
Khanna's sentiment is echoed by a growing number of wealth managers in Asia who are setting up offices in Dubai. They are leveraging the strengthening diplomatic ties between China and the Middle East and responding to clients' increasing demand for geographic diversification.
"I firmly believe that the next decade in wealth management will be significantly influenced by Asia and the Middle East," Khanna added.
According to the Boston Consulting Group's Global Wealth Report 2024, global net wealth—which includes financial wealth, liabilities, and real assets—rose by 4.3% last year, a significant increase from 0.2% the previous year. The Middle East and Africa led the way with a 7.8% jump.
The United Arab Emirates (UAE) saw the highest growth rate as a booking center, with an 8.9% increase in cross-border wealth inflows, particularly from Saudi Arabia and other affluent Middle Eastern markets. This growth is also attributed to the UAE's role as a cross-border hub for Asia and Africa, driven by closer ties with China and substantial international investment in luxury real estate.
Bank of Singapore is contemplating establishing Dubai as one of its booking centers in the future. Currently, its booking centers are in Singapore and Hong Kong.
As part of Singapore's second-largest lender, Oversea-Chinese Banking Corporation (OCBC), Bank of Singapore is also looking to expand its presence in the Middle East by leveraging OCBC's network in Southeast Asia, China, and Britain. OCBC's wealth AUM, inclusive of Bank of Singapore, reached a record S$279 billion ($213.5 billion) in the second quarter, marking a 2% increase.
In addition to the wealth from global South Asians, affluent individuals from oil-rich Gulf states, and Europeans in Dubai, there is a growing interest from wealthy Chinese clients, Khanna observed. "I'm witnessing an increasing flow of mainland Chinese clients coming into Dubai and the broader region," he said.
Analysis: Breaking Down the Impact
Let's break this down in simpler terms. Bank of Singapore is a big player in managing wealth, and they want to double the amount of business they do in the Middle East. Right now, about 10% of their business comes from that region, and they want to make it 20% in the next few years.
Why do they want to do this? Dubai and the UAE have become very attractive to rich people worldwide, especially after COVID-19. The government has made it easy for wealthy individuals to move and do business there. Plus, they've got great infrastructure and special visas that make it even more appealing.
The bank sees a lot of potential in this region, not just because of the rich locals but also because of wealthy people from China and other parts of Asia who are interested in moving their money there. If Bank of Singapore succeeds, it could mean more investment opportunities and economic growth in the Middle East.
For everyday people, this means that if you have investments or are thinking about where to put your money, regions like Dubai might become even more attractive. Wealth growth in these areas could lead to better investment returns and more financial opportunities.
So, keep an eye on how banks like Bank of Singapore expand into new regions. It could have significant implications for global wealth distribution and where the smart money is heading next.