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Khaled Ahmed Suleiman Global Head of private banking and CEO NBAD Private Bank (Suisse) SA. Switzerland as a Hub for Wealth Management. April 10, 2013. Disclaimer.
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Khaled Ahmed Suleiman Global Head of private banking and CEO NBAD Private Bank (Suisse) SA
Switzerland as a Hub for Wealth Management • April 10, 2013
Disclaimer This document has been prepared by NBAD Private Bank (Suisse) SA. The opinion expressed in this document is not the result of financial analysis provided by NBAD Private Bank (Suisse) SA. Therefore the regulation of the Swiss Bankers Association regarding the independence of financial analysis does not apply tothis document. Accordingly, the views expressed in this publication are not official recommendations of NBAD Private Bank (Suisse) SA and should beconsidered as market comments for information purposes only. As such, the views herein may be subject to changes and are indicative only. This document should not be considered as an offer or recommendation to buy or sell any financial instrument or banking services. The document has beenprepared without regard to the individual financial circumstances and objectives of persons who receive it. The securities mentioned in this document may not be suitable for all investors. The appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives. Many factors may affect the value of a financial instrument. Investor shall therefore conduct their own analysis of the risks (including any legal, regulatory, tax orother consequence) and benefits associated with a transaction in a given financial instrument and should seek independent professional advice. Although this document has been produced with all reasonable care, based on sources believed to be reliable, NBAD Private Bank (Suisse) SA makes no representation or warranty as to the accuracy or completeness of this document and accept no liability for any loss or damage which may arise from the use ofthis document.
Switzerland – Wealth Management HubArabbanks in Switzerland • The National Bank of Abu Dhabi set up NBAD Private Bank (Suisse) SA in Geneva in 2007, and was the first UAE bank to open in Switzerland, with an initial investment of CHF 100 million. • Aabar Investments, one of the UAE investment institutions has sincepurchased the ex-AIG Private Bank (renamed as Falcon). Qatar investment institutions bought KBL (includingitsSwiss Private Bank) and an important stake in Credit Suisse. • Other Gulf Banks presentinclude NBK and QNB, and from the widerArab world includeArab Bank, BLOM Bank, Bank Audi, and Bank Med. • NBAD has had a very positive experiencewithitsSwiss Bank. Despitelaunching in mid 2007 at the start of the financialcrisis, NBAD has grownconstantly in terms of AUM, profits and people, and made over CHF 10 million net profit in 2012. • Geneva isalso the leading world centre for commoditytrade finance, and both NBAD and Arab Bank have become key playersincludingmembers of the Geneva Trade & Shipping Association (‘GTSA’).
Switzerland – Wealth Management HubWhatSwiss Banks canoffer to ArabInvestors • NBAD, whichalso has a full privatebankingoperation in the UAE, has made itsSwiss Bank the centre of gravity for its global privatebanking business, in order to meet the preferences of Arabinvestorstowards Switzerland as theirprivatebanking hub. • Arab Clients are attracted to banking in Switzerland due to : • International reputation for effectiveness, efficiency and discretion. • Long tradition of political and legalstability. • Long tradition of services to high-end clients (hotels, watchmaking and healthcare). • The service qualityand range of offeringsfromexperienced personnel (wealth management as opposed to productselling). • Client confidentialityisconsidered important for protectingtheirprivacy. It is important to note that in many parts of the Gulf there are no income taxes nor capital export restrictions. Therefore, clients are not looking for fiscally-drivenbankingsecrecy, but ratherprivacy in theirfinancialaffairs and wealth management. • For clients preferringinvestmentsaccording to Sharia rules, Private Banks, whilstbeingtraditional, canofferaccess to severalIslamicproducts (such as Sukuk, Funds not investing in alcohol, arms, etc).
Switzerland – Wealth Management HubWhatSwiss Banks canoffer to ArabInvestors • Geneva has someadditional points: • With a resident population thatisaround 40% foreign, Geneva is a melting pot, welcoming to all cultures and religions with the vitalitythatopennessimplies. • Many Middle East clients spendsummer vacation in Geneva and surrounding areas (over 80% of Geneva 5 star hotelrooms in July and August are occupied by Middle East visitors). • The one negative point for Arab clients isthe stamptaxduty on transactions in Switzerland. They do not have to paythis if theypurchasethroughtheiraccountsin the UAE, Singapore, etc. • Finally, itis not just a one-waystreet. For example, NBAD Geneva has welcomesSwiss and European institutions / privateinvestorswhowish to place part of theirasset allocation into the MENA region.
Switzerland – Wealth Management HubWhatdoes Switzerland offerArab Banks • Fromthe viewpoint of the Bank, Switzerland is a very attractive location to base a Private Bank, due to: • The Swissfinancialmarket place is a centre of competencefor Private Banking, with a high concentration of banksand asset managers in financial hubs such as Geneva. Nearly one-third of the world’s offshore private assets are managedfromSwitzerland. • Geneva has around 130 banks (of which 60 are foreignbanks) and over 3,200 financialintermediaries, 850 asset managers, numerouslawyers, fiduciary experts and consultants. This cross-fertilizationis an engine for growth. • For Banks following an open architecture approachthis leads to good access to otherinvestmentproducts and service providers. • It alsoensures a large pool of highlyspecialised and experiencedprivatebankers (for example in Geneva, around 15% of the population are employed in the financial services industry) and itis a magnet for the brightest talents in the wealth management world. • A very high quality of life exists, whichassists in attracting and retainingtalent. • First rate communications, access and infrastructure. • In general, compared to non GCC countries, an attractive tax system.
Switzerland – Wealth Management HubKey Points • Switzerland isstill a highly attractive financial centre for Middle East clients. • The main negative point is the stamptaxlevied on transactions. • Due to client demand for Switzerland, as well as the excellent infrastructure, highlyexperiencedbanking personnel and stable environment, Switzerland remains the location of choice for privatebankingoperations. • This isevidenced by the growingnumberof Arab Banks present in Switzerland, as well as the number of otherSwissbasedbanksmovingtheir focus more towards the Arab HNWI market. • The role of Geneva as a capital of Trade Finance (especiallycommodities) isalsoverystrong, and makes Switzerland one of the leading centres for trade finance and bankingservices.