x Abu Dhabi, UAESaturday 29 July 2017

JPMorgan expanding private banking in Gulf

JPMorgan targets the Middle East in an attempt to offset diminishing returns in its native US.

JP Morgan is focusing investment on Qatar, Saudi Arabia and Abu Dhabi. AFP
JP Morgan is focusing investment on Qatar, Saudi Arabia and Abu Dhabi. AFP

JPMorgan is expanding its private banking operations in the Middle East as it attempts to tap into rapidly growing Gulf wealth and fend off trouble in its native US market.

The bank, the second biggest in the US by assets, is focusing investment on Qatar, Saudi Arabia and Abu Dhabi, where it has opened an office on Sowwah Island.

JPMorgan, which has assets under management of US$1.3 trillion (Dh4.77tn) across its wealth management arms, has also relocated its regional private banking headquarters to Dubai from Bahrain.

The aim is to attach its operations to the Dubai-based investment banking division and create savings while strengthening relations with clients in the region, said Paolo Moscovici, the bank's head of private banking for the Middle East.

The wealth of some private individuals in the Middle East increased exponentially during the past decade as the surging price of oil redistributed wealth from West to East, leaving a new generation of entrepreneurs seeking to protect their riches.

"The opportunity for growth in this region, in terms of private wealth growing, is tremendous," Mr Moscovici said. "Some of the newer wealth here in the Emirates and Qatar, and the new entrepreneurs, they've concentrated most of their wealth creation locally."

The number of millionaires in the Middle East grew at a rate of 10.4 per cent last year to a total of about 400,000, according to the 2011 World Wealth Report, produced by Merrill Lynch and Capgemini. JPMorgan will retain its operations in Bahrain, said Mr Moscovici, adding that the decision had been made before the outbreak of political unrest in the kingdom this year.

The renewed focus on the Middle East comes as fears return over the health of the banking sector in the US. The bank's shares have lost 19.6 per cent since the beginning of August, while Jamie Dimon, JPMorgan's chief executive, has warned that Basel III regulations on bank capital will inhibit American lenders in competing with international rivals.