Emirates Investment Bank publishes its first GCC Wealth Insight Report
Dubai, UAE; 18 March 2014: Emirates Investment Bank (“EIBank”), a client-focused, independent private and investment banking boutique headquartered in Dubai, today published its first “GCC Wealth Insight Report”. The objective behind creating this report is to better understand the views of high net worth individuals (HNWIs) across the Gulf on both local and global economic sentiment, financial drivers, opportunities and challenges as well as factors that impact both wealth and financial decision-making in regards to banking and investments.
The GCC Wealth Insight Report 2014 is based on a survey of HNWIs from the United Arab Emirates, Qatar, Kuwait, Saudi Arabia, Oman and Bahrain. For the purposes of this study, HNWIs are defined as individuals with US$2 million or more in investable assets. This survey was undertaken in the last quarter of 2013, a time when the GCC was widely recognised as the standout emerging/frontier market. With more infrastructure spending and higher consumer confidence across the GCC, GDP growth is forecast for the region to grow by 3.7% in 2013 and 4.1% in 2014.
Current and Future Economic Sentiment
More than half (54%) HNWI surveyed think the current condition of the global economic situation is staying the same and almost half (46%) believe it will improve in one year
GCC HNWIs are nearly twice as likely to say the economic situation is improving in the Gulf (56%) than globally (30%)
GCC HNWIs are more optimistic on the prospects for the Gulf region over the next five years (87%) than for the global economy over the same period (75%)
Attitudes towards Banking and Investment Decisions
More GCC HNWIs (66%) have had their banking and investment decisions affected by the global downturn than local economic conditions (43%) or the Arab Spring and events that followed (46%).
Out of those who have been affected by the global downturn, 38% are now more conscious and cautious of the risks related to their investments, 21% have restricted or reduced their global investment activities and 13% have focused on investments in the Gulf region
Half (49%) of those who have had their investments affected by the Arab Spring are now hesitant to make new investments in affected countries, though views on regional investments depend on the country being considered
Financial Allocation Decisions
GCC HNWIs are nearly twice as likely to prefer to invest in assets closer to home (64%) rather than globally (36%) mainly due to their confidence in the local economy
GCC HNWIs who invest globally do so mainly to seek greater stability from developed markets (24%) or want to diversify risk (24%)
90% of GCC HNWIs are more focused on wealth generation than preservation
Most HNWIs spread their current wealth across a range of investments with 34% allocating wealth in their own businesses and 25% invest in real estate as an investment
Two thirds expect to increase investments into their own business (65%) and real estate (65%) in the near future
The UAE, China and Europe are preferred investment destinations over the next 3 - 5 years
Choosing a Banking Partner
More than half (59%) of respondents prefer a local bank to help manage their wealth
Level of service, brand and reputation, and fees are rated the most important factors in selecting a local banking partner
Large majority (84%) find investment banking advisory services important
61% prefer to use separate banks to manage personal wealth and business banking
Commenting on launch of the report, Khaled Sifri, CEO of Emirates Investment Bank, said:
“Among the Gulf’s wealthy, there is a healthy balance of caution as well as optimism. As a private and investment bank dedicated to growing and safeguarding wealth, we, at Emirates Investment Bank, are committed to further developing the wealth management sector in the GCC. The findings of this inaugural report offer insight into how wealthy entrepreneurs, executives and professionals based in the Gulf make important investment decisions.
“Our focus as a bank is on thoroughly understanding each client’s unique needs and designing a wealth strategy that is tailor-made to meet them. We understand that one size does not fit all. This survey embodies the varying characteristics, commonalities and differences of views among a truly unique cross-section of society.”
Emirates Investment Bank commissioned this report and partnered with Ipsos, a leading market research company operating globally with expertise in developing, managing and co-ordinating international research, and Brunswick Insight, which focuses on using opinion research to help clients better understand their relationships with stakeholders and communicate more effectively, to conduct this study on the Bank’s behalf in order to ensure the accuracy of the findings and independence of the analysis.
The full “GCC Wealth Insight Report” is available on www.eibank.com
In 2008, Emirates Investment Bank redirected its strategy towards building a wealth management platform offering customised private and investment banking services to a select yet diverse client base. For the year ended 31 December 2013, the Bank’s assets under management grew 71% to AED 4.26 billion compared with AED 2.49 billion in 2012.