Plan to tap into region's wealthy set to more than double the bank's assets under management
Swiss private bank Falcon, wholly-owned by Abu Dhabi fund Aabar Investments, expects to more than double its assets under management in the Middle East by tapping into the region's wealthy, its chief executive said.
"Our focus on the Middle East began recently and in about nine months our assets under management totals $400 million. It will reach $1 billion relatively soon," Eduardo Leemann told Reuters in a telephone interview.
Zurich-based Falcon Private Bank Ltd, which was the private banking unit of American International Group (AIG) before Aabar bought it in April 2009, also plans to open an office in Abu Dhabi in the first quarter of 2011 and is eyeing an investment advisory licence.
The bank opened an office in Dubai earlier this year.
"High net worth individuals in the region are extremely focused on returns and want to leverage up their investments. They are also looking for a lot of structured products," Leeman said.
Falcon currently manages assets worth $12 billion, up from $11.1 billion last year. Its assets have grown by about 50 percent since Aabar took over the bank.
"It was due to a combination of rebuilding the strategy and focusing on the private banking market that is growing very fast here," said Leemann, who also led the bank when it was a unit of AIG.
While the private banking side is growing well, the institutional segment, currently at $4 billion, may bottom off at $3.5 or $3 billion as the focus shifts to private banking rather than institutions, Leeman said.
"In the private banking space, we expect growth of 20 to 25 percent and key growth regions are the Middle East, Asia and Russia," he said.
"Emerging markets offer extremely good growth potential and growth is in the East."
Falcon manages wealth of mainly high net worth individuals with a minimum account size of $5 million in the Middle East whereas in Asia and Russia the minimum size is $2 million, he said.
Global private banks are increasingly turning their eyes to Asia, where -- with the exclusion of Japan -- wealth is expected to grow at nearly twice the global rate, according to the Boston Consulting Group.
Leeman said Falcon had no plans for acquisitions in the short term.
"This is not our strategy for now, we will grow organically and aggressively," he said.
The bank has a 42.5 percent stake in Zweiplus, a Swiss bank specialized in retail investments.
Aabar, which recently delisted itself from the Abu Dhabi Securities market, is majority-owned by International Petroleum Investment Company (IPIC), an Abu Dhabi government investment entity.
The fund, Abu Dhabi's fastest growing investment vehicle, bought the private banking unit -- one of the assets AIG was forced to sell pay its federal debts -- last year for $254 million and renamed it Falcon Private Bank. (Reuters)For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.