BNY Mellon, the U.S. bank with more than $ 2.3 trillion in assets under management, expects business in the Middle East to surpass its level of global growth over the next five years, driven by momentum markets in Saudi Arabia and the United Arab Emirates.
Last year, the bank experienced “healthy, single digit” year-over-year organic growth in markets such as the Middle East and Africa, which was driven by new business.
However, he expects the region to surpass its global business growth over the next five years, said Hani Kablawi, president of international operations at BNY Mellon. The National Thursday in Riyadh.
“[The business] growing faster here in the region, ”he said on the sidelines of the fifth Future Investment Initiative forum.
“There are disproportionate growth opportunities in the region. “
Vision 2030 in Saudi Arabia, the largest Arab economy and OPEC’s largest oil exporter, has “underlying real and measurable plans”, which will lead to significant investments – both in the region and in the region. the world, Kablawi said.
“You have a vision in Abu Dhabi, which is being carried out” and there is “an action underway in Kuwait” and there is a work in progress in Oman that “we are close and in which we believe”, did he declare.
“I think this is true for the region but… nowhere is more true than in the United Arab Emirates and Saudi Arabia [Arabia]. “
The rulers of the six-member economic bloc of the GCC are transforming their economies to reduce their dependence on oil revenues. Opening up the financial sector and attracting foreign direct investment are at the heart of regional economic overhaul programs.
Foreign capital is flowing into regional capital markets, some of the best performing exchanges in the world, and has increased as part of continued reforms in recent years. The GCC government and private issuers have also tapped into debt capital markets amid historically low global interest rates which have created more business opportunities for banks such as BNY Mellon.
Interest in investing in the region is on the rise, particularly in Saudi Arabia, as the country’s Capital Markets Authority “drives the right conversation with the private sector globally to ensure that the market here is attractive for foreign investment, ”Kablawi said. .
He “removes all obstacles” and “I think there will be more money coming to the region over the next five years, both in the private and public markets”.
The wider Middle East is “a very important part” of the bank’s global operations, said Mr. Kablawi, who has been associated with BNY Mellon’s Middle East activities since 1997.
“It was important in 1997 and it has only increased since then and it’s year after year of growth,” he said. “We haven’t seen a single year of decline in our business.
“It’s a holistic statement” in everything the bank does, including trade finance, payment flows, custody, investment and asset management services, and aid regional debt and equity issuers to access global markets, he added.
The bank’s customer base includes sovereign wealth funds, regional central banks, commercial lenders, regional insurance companies and pension funds as well as private issuers.
In terms of investment management activity, BNY Mellon’s clientele, “without exception”, is interested in environmental due diligence, government and social standards and “understanding the dynamics of sub-investment. underlying in companies at the individual security level and in portfolios or funds at the global level, ”said Mr. Kablawi.
In August, the bank, which has $ 45 billion in assets in custody and administration around the world, announced a deal with SNB Capital, a unit of Saudi National Bank, the kingdom’s largest lender, to provide global securities services to institutional investors and large asset owners. in Saudi Arabia.
The deal allows BNY Mellon’s clients to have a single point of contact and a single source of data for their investment portfolios inside and outside the kingdom, Kablawi said.
The bank is also looking to forge similar alliances in other markets in the Middle East and Africa, he said, declining to give further details.
BNY Mellon, which established its representative office in the Abu Dhabi global market in 2019, has been operating in the region for over 100 years. It opened its first regional representative office in Lebanon in 1963 and also obtained a branch license in 2008 from the Dubai Financial Services Authority.
Over the next five years, the bank plans to invest to serve its institutional clientele through increased digital and data capabilities, which is a “very important pillar for us,” Kablawi said.
“We are happy but not satisfied and complacent with the progress we have made and are always looking to further develop our platform to better serve our customers,” he added.
Update: October 30, 2021, 5:30 a.m.