The arrival of wealth from Russia and other countries in the former Soviet bloc is providing a boon for banks in Dubai and Abu Dhabi.
Money from Central Asia boosts bank coffers in UAE
The appearance of Russian hats and furry overcoats in the UAE might not entirely be explained by the recent cold snap.
Booming economies in Russia and former Soviet states in Central Asia are increasing flows of capital to banks in the Emirates, as greater numbers of wealthy individuals from those countries forgo Switzerland and London for Dubai.
Increasing numbers of customers from the former Soviet bloc are being drawn to Dubai and Abu Dhabi, said Julien Faye, a partner and the head of financial services at Bain & Company Middle East.
"Some banks have started developing their business in Central Asia," he said. "It's a bit of a new dimension. The money of the Middle East has been going to the UK, Switzerland and Singapore. But now we're attracting money from Kazakhstan, Central Asia and Russia."
Between 2000 and last year, average wealth per adult in Russia increased by more than six times and more than tripled in Kazakhstan, according to data from Credit Suisse.
But many so-called oligarchs who became wealthy during the Putin era have bemoaned the failing rule of law in Russia, with the jailing of Mikhail Khodorkovsky drawing particular ire. Many Russian business magnates migrated to the UK during the decade, with a boom in numbers of listings of energy and mining giants on the London Stock Exchange such as Kazakhmys, a Kazakh copper miner, and Russia's Rosneft oil company.
But Russian and Central Asian institutional investors are now showing "heightened interest" in the opportunities available in the Middle East, said Khalid Murgian, the executive director at Goldman Sachs Asset Management.
"There's a sense that this is an area that the Russians have ceded a little bit," he said.
Numbers of new clients coming from Russia and Central Asia to Dubai have been enough to convince Lombard Odier to open a hub in the emirate to assist in advising them, said Christophe Lalandre, an executive vice president at the Swiss bank. "Now Dubai is becoming the hub for developing these new markets," he said.