BNY Mellon, the U.S. bank that manages more than $ 2.3 trillion in assets, expects its Middle East business to outperform global growth over the next five years, fueled by the boom in the two largest Economies of the Arab world.
The bank had “healthy single-digit” organic growth over the past year in all markets such as the Middle East and Africa, driven by new business.
However, it expects the region to outperform its global business growth over the next five years due to growth in Saudi Arabia and the United Arab Emirates, said Hani Kablawi, chairman of international operations at BNY Mellon The national in Riyadh.
“[The business] growing faster here in the region, âhe said on the sidelines of the Future Investment Initiative’s fifth forum. “There are enormous growth opportunities in the region.”
The Vision 2030 in Saudi Arabia, Opec’s largest oil exporter, has “real, measurable plans behind it” that will lead to significant investments – both from the region and worldwide, said Kablawi.
“You have a vision in Abu Dhabi that is being implemented” and there is “action in Kuwait” and there is work in Oman that “we are close to and that we believe in,” he said.
âI think it applies to the region, butâ¦ nowhere is it more true than in the United Arab Emirates and Saudi Arabia [Arabia]. “
The sovereigns of the GCC’s six-member economic bloc are transforming their economies to reduce their reliance on oil revenues. Opening up the financial sector and attracting foreign direct investment are central elements of the regional economic reform agendas.
Foreign capital flows to the regional capital markets, which are some of the best performing stock exchanges in the world, and have increased in the wake of ongoing reforms in recent years. Government and GCC corporate issuers have also entered the bond capital markets in the face of historically low global interest rates, which has opened up more business opportunities for banks like BNY Mellon.
Interest in investing in the region is growing, particularly in Saudi Arabia, as the country’s capital markets authority “is promoting the right discussions with the private sector around the world to ensure that the market here is attractive to foreign investment,” said Kablawi.
It “removes all barriers” and “I believe there will be more money going into the region over the next five years, both in the private and public markets”.
The broader Middle East is “a very important part” of the bank’s global operations, said Kablawi, who has been associated with BNY Mellon’s Middle East operations since 1997.
“It was significant in 1997 and has only grown in importance since then, and that is year after year of growth,” he said. “We haven’t had a single year of declines in our business.”
“It’s a holistic statement” for everything the bank does, including trade finance, cash flows, custody, investment and wealth management services, and helping regional issuers of bonds and stocks access global markets, he added.
The bank’s customer base includes sovereign wealth funds, regional central banks, commercial lenders, insurance companies and regional pension funds, as well as corporate issuers.
In relation to the investment management business, BNY Mellon’s clients are “invariably” interested in the due diligence of environmental, government and social standards and “the dynamics of the underlying investments in companies at the individual stock level and in portfolios or funds at the aggregated level”, said Mr. Kablawi.
In August, the bank, which holds or manages $ 45 trillion in assets worldwide, announced a deal with SNB Capital, a unit of Saudi National Bank, the UK’s largest lender, to provide global investment services to institutional and large asset owners in Saudi Arabia.
The transaction gives BNY Mellon’s clients a single point of contact and data source for their investment portfolios in and outside the UK, Kablawi said.
The bank is also seeking similar alliances in other Middle Eastern and African markets, he said, declining to provide further details.
BNY Mellon, which opened its representative office in the Abu Dhabi Global Market in 2019, has been operating in the region for more than 100 years. It opened its first regional representative office in Lebanon in 1963 and received a branch license from the Dubai Financial Services Authority in 2008.
Over the next five years, the bank plans to invest in serving its institutional clients through expanded digital and data capabilities, which is a “very important pillar for us,” said Kablawi.
“We’re happy but not happy and complacent with the progress we’ve made and are constantly looking to expand our platform to better serve our customers,” he added.
Updated: October 30, 2021, 8:07 am