Geneva lenders optimistic about Middle East growth


The Switzerland-based bank Banque Cantonale de Genève is confident of stable growth in the Middle East for the next five years despite the global economic uncertainty triggered by Covid-19. The bank, which is over 200 years old, is not aiming for exponential growth in the region as it has a conservative approach to investing, its chairman said.

“We have been very pleased with the customer growth in the region over the past five years,” said Blaise Goetschin, CEO of Banque Cantonale de Genève The national.

“I am not expecting an explosion in growth, but rather a gradual improvement in the three business areas on which we are concentrating.”

Our first priority in the region is the United Arab Emirates. We are also interested in Oman, Saudi Arabia, parts of Iraq, Jordan and Egypt

Blaise Goetschin, CEO of the Banque Cantonale de Genève

The medium-sized bank is active in the areas of trade finance, correspondent banks and private banking. It has had a representative office in Dubai and another in Hong Kong since 2010 in order to address customers in Asia.

BCGE, which had $ 33.4 billion in assets under management worldwide for the first half of this year, has $ 500 million to $ 800 million in assets under management from the Middle East, Goetschin said.

The Middle East accounts for 3 to 4 percent of the bank’s total global sales. Switzerland is the largest market, followed by France. The Middle East and Asia account for the largest share of BCGE’s sales among international markets, said Goetschin.

“We see a lot of growth potential in the region due to the way the Covid-19 pandemic is dealt with, the prevailing peaceful situation and the internationally acceptable taxation,” he said.

The UAE’s financial wealth reached $ 600 billion in 2020, unaffected by the financial impact of the Covid-19 pandemic, after growing at an average annual rate of 3 percent from 2015, according to an August report by the Boston Consulting Group. About 69 percent of this was investable assets.

The United Arab Emirates, where 51 percent of the country’s assets are owned by people with net worth more than $ 5 million, accounted for 26 percent of the GCC’s financial assets in 2020, according to the consultancy. It is estimated that wealth in the Emirates will grow at an average annual rate of 4 percent to $ 700 billion through 2025. Total net worth in the GCC is projected to reach $ 6.3 trillion by 2025, up from $ 5.2 trillion in 2020.

BCGE, which aims to facilitate economic exchanges between Geneva and the United Arab Emirates, provides trade finance to commodity trading companies that trade in energy, metals and agricultural commodities in the Emirates and operate in Switzerland.

The correspondent banking team visits national banks in the United Arab Emirates and coordinates deposits, foreign exchange and other transactions between the banks. Meanwhile, its private banking arm is focused on Swiss and other nationalities in the UAE who keep part of their business in Switzerland for various purposes, such as to finance a home or business in their home country, the chairman said.

“Globally, trade finance is the most profitable for us. The correspondent banking business also recorded stable growth. However, there has been some slowdown due to the pandemic. Now it is recovering, ”said Goetschin.

“Our first priority in the region is the United Arab Emirates. We are also interested in Oman, Saudi Arabia, parts of Iraq, Jordan and Egypt, which imports many products such as grain, wheat, coal, sugar and energy. “

On the investment front, BCGE eschews the cryptocurrency space and avoids accepting clients who prefer a more aggressive investment strategy, the CEO said.

“We are skeptical of private, non-legal cryptocurrencies. We recommend our customers not to invest in cryptocurrencies. “

In terms of risk perception, not much has changed after the pandemic, said Goetschin.

“People continue to believe in stocks, which are the most interesting asset classes. Bonds now offer very low yields. Private equity has made great strides in adoption.

“We have chosen a stable, consistent and methodical approach to the market. We diversified our portfolios and reviewed the stocks we invest in. “

Regarding client interest in environmental, social and governance investments, Goetschin said that for now the trend is just a communication exercise that involves lots of activities with regulators.

“It is very complex to measure the impact of an investment product. We’re a commercial bank, companies are making the transition, but it will take time. Don’t promise too much to investors, ”he said.

BCGE plans to consolidate its operations in the United Arab Emirates for the time being, the CEO said.

“We could add an employee or two every two years as the business grows. We are not aiming for large acquisitions. Our first priority is customer quality, ”he said.

BCGE is optimistic about the global economic recovery, said Goetschin, pointing to manageable inflation, low interest rates, peace and energy costs under control.

“The Middle East region is insured against energy prices in the short term, has intelligence and a manpower – all the perfect ingredients for success,” he said.

Updated: November 21, 2021, 6:00 a.m.


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