United Arab Emirates news: Continued growth in currency trading, private banking and remittances

An article in the National newspaper provides a historical snapshot of banking in the United Arab Emirates (FSI 2013 rank: 16th):

” the origins of the UAE banking system are older than the country itself.”

” In the 1960s, foreign banks (notably the British Bank of the Middle East, long since swallowed by HSBC) were the mainstay of the Emirates’ financial system, until in 1963 Sheikh Rashid bin Saeed Al Maktoum founded National Bank of Dubai.”

before moving to the central point that government support for the banking sector will remain strong:

“banking and finance have always been a priority of the UAE’s national strategy”

“The system has undoubtedly worked well. As Moody’s also points out: “Over the past 35 years, no depositors or bondholders have lost money, a trend maintained during the recent financial crisis”. In all that time, only one bank and two other financial institutions have had government aid in extreme financial circumstances. That is a very good record set against the carnage experienced by American and European banks.”

A future growth area in the region is seen as international currency trading, with an Abu Dhabi brokerage opening an office in Hong Kong, which could soon be followed by one in London.

In other UAE news, an article titled ” Advice from Coutts that wealthy families can bank on” carries an interview with the managing director of the “Coutts institute”:

“Wealth can be as much a burden as a benefit for some families. Coutts Institute advises wealthy families on inheritance planning and family-run businesses on succession. The institute is a unit of Coutts, the UK-based private bank with operations in its domestic market, Switzerland, Hong Kong, Singapore, South East Asia and the Middle East.”

“Many of the clients here have been educated in the UK, both in Sandhurst, school and university.”

“As a firm we want to help our clients achieve what they want from their wealth. What do clients want to achieve from their wealth? They want to grow part of it, they want to preserve part of it, they want to pass some on to their kids and they want to have a bit of fun.”

Another market where the National reports that UAE is becoming a global player is remittances:

“Grace Rosalin works as a housemaid in Dubai’s Arabian Ranches. A native of the Pangasinan province in the Philippines – a five-hour bus journey north of Manila – she contributes, monthly, to the growing industry of global remittances that topped US$530 billion in 2012, according to the latest World Bank figures.”

“The UAE, with its large expat population, is also fast becoming a world-class conduit for international cash transfers.”

Following Typhoon Haiyan, “… Filipino expatriates sent more money than usual to their families and aid organisations after the devastating natural disaster.”

“Leonardo Bello, the manager of Al Fardan Exchange’s branch in Al Wahda Mall, said remittances to the Philippines grew 10 to 15 per cent in the week following the storm, before returning to their usual levels.”

“The Philippines is the third largest recipient of overseas remittances behind India and China, according to the World Bank.”

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