Bank of Singapore to Expand Middle East Presence, Targets 5-Year Growth Plan

The Bank of Singapore, among Asia’s largest private banks, is setting its sights on significant expansion in the Middle East, per a report in Reuters. The bank aims to double the region’s contribution to its overall revenue and private banking assets, increasing from the current 10 percent to as much as 20 percent within the next three to five years. This strategic focus underscores the bank’s confidence in the Middle East’s burgeoning wealth management market.

As of the end of September 2023, the Bank of Singapore reported an impressive growth in assets under management (AUM), reaching US$116 billion, a substantial increase from approximately US$20 billion in 2010. Despite its robust growth, the majority of the bank’s AUM remains concentrated in its Singapore and Hong Kong hubs. However, the bank is now actively looking to diversify its geographical footprint, with a particular focus on the Middle East.

Dubai: A new hub for global wealth

Dubai, in particular, has emerged as a key destination for global millionaires, especially in the post-COVID era. Speaking to Reuters, Ranjit Khanna, the Head of Private Banking for Europe and the Middle East and CEO for the Dubai hub at Bank of Singapore, highlighted the factors driving this trend. He noted that the UAE’s proactive federal government strategies, ease of doing business, modern infrastructure, and the introduction of the golden visa regime have made the region an attractive option for high-net-worth individuals seeking alternatives.

This influx of wealth has not gone unnoticed. A growing number of Asian wealth managers are expanding or establishing offices in Dubai, leveraging the increasingly warm diplomatic ties between China and the Middle East. This move is a strategic bet on the rising demand from clients looking for geographical diversification.

Khanna expressed his optimism about the future, stating, “I personally believe the next decade, in the context of wealth management, belongs to Asia and the Middle East to a great extent.”

The Bank of Singapore is evaluating the potential of making Dubai one of its booking centers in the future, complementing its existing centers in Singapore and Hong Kong.

The UAE growth market: BCG Wealth Report 2024

Global net wealth, which includes financial wealth, liabilities, and real assets, saw a significant increase last year, growing by 4.3 percent compared to 0.2 percent the previous year. The Middle East and Africa were standout performers, with a 7.8 percent jump in net wealth, according to Boston Consulting Group’s Global Wealth Report 2024. The UAE posted the largest percentage growth as a booking center, with an 8.9 percent increase in cross-border wealth inflows – at US$48 billion – sourced from Saudi Arabia and other prosperous Middle Eastern markets. BCG notes: “The UAE is on track to become the sixth-largest booking center in the world by 2028, with an annual growth rate of about 7.7 percent.”

This growth is partly due to the UAE’s increasing role as a cross-border hub for Asia and Africa, driven by closer ties with China and significant international investment in the luxury real estate market. This shift is helping to compensate for a decline in inflows from Russia, which had been a significant growth driver in 2022 and 2023 following Western sanctions. While the initial surge of Russian wealth has largely been relocated, the UAE is now addressing international concerns regarding the ongoing war in Ukraine by tightening banking regulations and enhancing its scrutiny of Russian companies.

Leveraging OCBC’s global presence, tapping affluent Chinese clients

As part of Singapore’s second-largest lender, Oversea-Chinese Banking Corporation (OCBC), the Bank of Singapore is also looking to grow its presence in the Middle East by leveraging OCBC’s extensive network across Southeast Asia, China, and Britain. OCBC’s wealth AUM, including that of the Bank of Singapore, reached a record S$279 billion (approx. US$213.5 billion) in the second quarter, reflecting a 2 percent increase.

Beyond tapping into the growing wealth of global South Asians, Gulf state residents, and Europeans in Dubai, the Bank of Singapore is also seeing a rising interest from affluent Chinese clients. “I’m certainly seeing an increasing flow of mainland Chinese clients coming into Dubai and the region broadly,” Khanna told Reuters.

Outlook

The Bank of Singapore’s ambitious plans for the Middle East reflect a broader trend of wealth migration and the strategic importance of the region in global wealth management. As the bank continues to explore opportunities and expand its footprint, its focus on Dubai and the Middle East positions it to capture a significant share of the growing wealth in these markets over the coming years.

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