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From Geneva to Dubai: Lombard Odier shares its private banking ambitions in the Middle East
Article published initially by Wealthbriefing on 1 July 2024
The private banking industry has been transformed by mergers and acquisitions (M&A) and while there are reasons some businesses go for scale, many high net worth and ultra-HNW people prefer “pure-play” private banking, which is also bespoke and close to what clients want, according to Amer Malik, Head of Middle East International at Lombard Odier Group.
There’s been plenty of mergers – such as the UBS/Credit Suisse merger in March of 2023 – and there may be more to come. What is always at stake, but not always addressed, is where this leaves the actual client. In regions such as the Middle East, there remains a premium for banks with tradition, the ability to be patient, and the capacity to understand clients’ specific needs, Amer Malik, Head of Middle East International at Lombard Odier Group, told WealthBriefing.
Pure-play private bank attractiveness
“Clients are realising that bigger is not necessarily better. They like a pure-play private bank with a Swiss heritage and security,”.
Such qualities count when, for example, the Middle East region is seeing more than USD 1 trillion changing hands between generations between now and 2030, Malik said1. He referred to industry figures showing that more than 85 per cent of people who inherit wealth decide to use a different advisor to their parents2. “What sets us apart is our ability to be nimble and bespoke,” he said, arguing that Lombard Odier benefits from having a relatively “flat hierarchy.”
In February, Lombard Odier reported that its assets under management were CHF 193 billion (USD 214.6 billion) at the end of December 2023, up from CHF 192 billion at end-2022. Positive net new money inflows and a favourable market impact were offset by negative currency effects, due to the strengthening of the Swiss franc. At the end of 2023, operating income stood at CHF 1.402 billion (vs CHF 1.380 billion in 2022); consolidated net profit was CHF 221 million (vs CHF 243 million in 2022).
Reimagining private banking and burgeoning financial hubs in the UAE
Malik is based in the gate building of the Dubai International Financial Centre. He was appointed to the Swiss private bank in May last year, having previously worked for Julius Baer for more than eight years, and was also based in Dubai at that Swiss private bank. Prior to that, he was at the private banking arm of HSBC.
Dubai’s growth – it is now a major centre for non-resident Indians, expat Europeans (UK, continental Europe, etc), and those from the Middle East – makes it an important wealth hub. It has added the expat, international dimension after having initially focused on serving domestic Gulf region money. With Abu Dhabi Global Market taking the competitive game to the DIFC, these are interesting times to be a Gulf-based banker.
And, with the UK ending the resident non-domicile (“non-dom”) system, places such as the United Arab Emirates are in a position to prove their attractions. “The UAE already has a vibrant expat community out there," he said, arguing that beyond rising financial and business sophistication, the quality of life, and safety of the jurisdiction, is a draw.
Besides its office in the DIFC and ADGM, Lombard Odier also covers the region via Switzerland. Wealthy individuals from the Gulf have a long-standing like of visiting the Alpine state. Around 30 staff are based in the region.
Expats in the Middle East tends to establish in the region
One shift that Malik noted is that many expats used to go to the region thinking they were making a short-term move, but more have chosen to stay. This is aided by the UAE widening access to residency visas.
Wealthbriefing asked Malik how the firm measures success. “We don’t measure success only in terms of numbers. We feel great pride when our clients trust us enough to introduce us to their children and involve us at an early stage to educate the next generation. We are pleased to be able to introduce them to the world of investments and wealth management, which in turn enables us to better understand their needs and form strong bonds. That is success for us,” he replied.
“On the financial side, we have ambitious growth plans for the region, with increased coverage from Switzerland and the UAE. Our short-term target for the UAE offices is to double client assets by 2026,” he continued.
Malik enthused about a number of hires. “We are also reinforcing our focus on the region at the level of the executive committee supervising the bank’s wealth management. The recruitment earlier this year of experienced manager Ali Janoudi to lead the business not only in the Middle East but also in Turkey, Eastern Europe and Africa, is the perfect demonstration of our commitment to these important and promising markets,” he said.
The opportunities are there to be seized, he concluded. “The next generation of clients should be of utmost importance for all wealth managers. Over two thirds of the next generation inheriting wealth change the financial advisors of their parents. With USD 1 trillion of intergenerational wealth transfer expected in the Middle East by 2030, this topic should be of utmost importance. It is a challenge as well as an opportunity for wealth managers, depending on how they prepare themselves and adapt to the preferences of the next generation of clients,” he said.
About the WealthBriefing MENA Awards
In November 2023, Lombard Odier won two prestigious prizes at the WealthBriefing MENA Awards for Excellence for the second year in row. The bank collected the awards for best "Overall International Private Bank" and best "Shariah-Compliant Wealth Management Offering," having won both last year.
Access to the full original version of the article here
1 Almost USD 1 trillion ME assets to be transferred to next gen by 2030 (citywire.com)
2 Attracting the next generation of inheritors and self-made wealthy (ft.com)
Important information
This document is issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter “Lombard Odier”). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This document was not prepared by the Financial Research Department of Lombard Odier.
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