DUBAI // UBS, the Zurich-based investment bank, says it will make a significant investment to expand its Middle Eastern operations, seek new business opportunities and accelerate the bank's growth in the Gulf. UBS has cut 2,600 investment banking jobs this year after being forced to write down US$37 billion (Dh136bn) as a result of the US subprime crisis. The bank, which already operates in the GCC from its base in the Dubai International Financial Centre (DIFC), said it had secured a license from Saudi Arabia's Capital Markets Authority (CMA) to launch operations in the kingdom by the end of this year, and had also applied for a license to launch in Qatar.
UBS is moving John Fraser, its chairman and chief executive of global asset management, from London to take over as the chairman of UBS Saudi Arabia. Also from London, Mohammed Sammakia, the managing director of UBS's fixed income division and president of the Middle East, will become the chief executive of the new Saudi operation. The move is part of a larger push to house more bankers in the booming Middle East region, which is flush with petrodollars from record high oil prices. This is in contrast to UBS's strategy for its London and New York offices, where it is scaling down operations as its traditionally strong markets in the US and Europe dry up.
UBS said its package of initiatives demonstrated the bank's long-term commitment to the Middle East and would help achieve its goal of becoming one of the region's leading financial services providers. "The CMA approval gives us the opportunity to extend our world-leading position in wealth management in the region, but also brings us closer to our asset management and investment banking clients in the Kingdom of Saudi Arabia," Mr Fraser said.
Further to the Saudi expansion, UBS has also applied for a licence with Qatar Financial Centre Regulatory Authority to tap into the wealth and asset management market in Qatar, which has both the highest GDP per capita in the world and one of the highest rates of economic growth. The bank is doubling its investment banking team and will establish regional coverage of Middle Eastern stock exchanges by the end of this year. UBS recently appointed Christopher Niehaus as its joint head of investment banking for the MENA region.
The bank has more than 200 staff in the Middle Eastern market, of which 65 are dedicated to the Gulf. The push to secure a strong position in the Middle East comes shortly after UBS received a cash injection of 2bn Swiss francs (Dh7.2bn) from an unnamed Middle East investor to bolster its capital, after losses mainly incurred on subprime securities. The cash infusion is part of a total of almost 29bn francs in cash that UBS has raised from new and existing shareholders.
The bank's global asset management earlier this year partnered with Abu Dhabi Investment Company (Adic) to form a joint venture to develop, promote and manage infrastructure funds focused on the MENA region. The $500 million Adic-UBS Infrastructure Fund-I is expected to launch this year. The bank operates in 50 countries and employs more than 80,000 people. Its shares are listed on the Swiss, New York and Tokyo Stock exchanges.
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