MIDDLE EAST INTERVIEW
Who are the UAE’s high-net worth individuals? Renoy Kundukulam: The UAE promotes entrepreneurial ventures based on trade, real estate, technology, and innovation, reflected in the fact the majority of the High Net-Worth Individuals are self-made businessmen and women, with a smaller portion being represented by professionals from across the globe. At Noor Bank, a third of our High Net-Worth Individual clients are from the Middle East, another one-third from Asia and the remaining mix from Africa, Europe, and the Americas.
impacted by the market dynamics globally and regionally, such as the lower oil price and higher levels of volatility. They are waiting for the opportune moment to move away from a preservation approach and are diversifying their investment portfolios. As shown by decades of financial market data, this is the correct approach to risk management.
The UAE wealth report, at the start of 2015, said there were approximately 72,100 millionaires (with net assets of $1 million or more) living in the UAE, with a combined wealth of over $300 billion. The UAE is also home for 1,275 ultra-high-net-worth individuals with net assets of US$30 million dollars or more. Around 495 of them live in Dubai, while 450 reside in Abu Dhabi. Across the Middle East, there are 5,975 of these tycoons.
How does your priority banking unit help clients manage their daily finances and achieve their long-term financial goals? Renoy Kundukulam: When it comes to managing finances, one of the primary needs our clients have is the ability to manage liquidity. Idle money does not grow. However, investing tends to lock in liquidity. To meet this requirement, we offer instruments that invest into capital markets with capital preservation strategies and offer liquidity anytime - without having to compromise on returns. This way our clients earn decent returns while enjoying liquidity for their business needs.
How have their attitudes towards wealth management changed over the past few years? Renoy Kundukulam: One change we have noticed is that the age profile has fallen, and younger investors have shown a higher risk appetite, shifting from primarily physical assets to financial assets. Many of these younger HNWI are sophisticatedly aggressive and experiment with higheryielding financial instruments from different asset classes.
We also train our Relationship Managers on a weekly basis and share market updates on a daily basis, to keep them informed of any new developments in the financial world that could affect their clients’ investments, or to identify new opportunities for their clients. While we do suggest tactical changes to the portfolio to benefit from short-term volatility, we also ensure clients do not lose sight of their long-term strategic goals.
In most developed markets and many emerging markets, banks tend to focus on local markets. For instance, European investors are primarily offered bonds, or equities, from Europe and the same is the case with India or Pakistan. However, in the UAE clients look at investment opportunities from various geographies. For instance, at Noor Bank, we have clients investing in structured deposits linked to a European sustainable index, or Mutual funds focused on developed markets such as the U.S., or even Emerging Market funds from Asia.
Thirdly, we have a highly experienced team of Relationship Managers who cater to the needs of our offshore clients. So our High Net-Worth Individual clients do not have to travel to transact, instead, we reach out to them to help them make personalised investment decisions.
Secondly, learning from their previous experiences, during the Sub-prime crisis in 2008, more and more investors are opting for well-diversified investment portfolios with tailored products that suit their needs. Finally, investor attitudes have been
How does Noor Bank help international clients with their wealth management needs? Renoy Kundukulam: As a highly flexible young organization, we provide our offshore clients with dedicated Relationship Managers allocated to different geographies to service their banking needs. There is a large base of clients in many of our target markets, where there is a higher concentration of clients who prefer Islamic banking. Our teams travel and reach out to these clients in their respective geographies to
help them choose the appropriate products and services they need. We understand that clients in different geographies have different needs. For instance, in the Middle East, investors are more focused on growth of wealth rather than just preservation – and hence, look for investments with a strong yield. Because of this, we manage their money in an appropriate manner and provide tactical opportunities that can give impetus for growth to the overall portfolio of the client whereas a European client might look for capital preservation. What are some of the products that you offer to your customers? Renoy Kundukulam: Through tie-ups with local and international partners, as well as an award-winning in-house treasury structuring team, our Priority Banking offers a wide range of wealth management products that cater to all four quadrants of our clients’ financial needs including savings and deposits, borrowing, protection, and convenience. We offer a wide range of Shari’a compliant mutual funds for investors who are interested in long-term capital appreciation. Our income-oriented customers can choose from a wide selection of Sukuk (Islamic bonds) with a variety of credit quality, maturities, and yields to meet their individual objectives. For those who prefer to safely participate in the global equity markets, forex, commodities or a combination of different asset classes, we offer structured deposit schemes with capital protection. For example, our Noor Sustainable Shari’a European Equities Linked structured deposit allows investors to participate in Shari’a compliant European equities, without risking their capital and delivers a minimum assured return. Our range of Takaful products take care of our client’s protection and regular savings needs. As a leading retail bank, we are well-equipped to manage other financial needs with enhanced offerings for Priority clients, such as Home Finance, Personal finance, and credit cards. Thus, the Priority proposition ensures that our clients have not only a wholesome banking experience but also exclusive lifestyle benefits. Issue 3
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