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April 10, 2013
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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 to this document. Accordingly, the views expressed in this publication are not official recommendations of
NBAD Private Bank (Suisse) SA and should be considered 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 been prepared 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 or other 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 of this document.
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Switzerland – Wealth Management Hub
• 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 since purchased the ex-AIG Private Bank
(renamed as Falcon). Qatar investment institutions bought KBL (including its Swiss Private Bank) and an important stake in Credit Suisse.
• Other Gulf Banks present include NBK and QNB, and from the wider Arab world include Arab Bank,
BLOM Bank, Bank Audi, and Bank Med.
• NBAD has had a very positive experience with its Swiss Bank. Despite launching in mid 2007 at the start of the financial crisis, NBAD has grown constantly in terms of AUM, profits and people, and made over CHF
10 million net profit in 2012.
• Geneva is also the leading world centre for commodity trade finance, and both NBAD and Arab Bank have become key players including members of the Geneva Trade & Shipping Association (‘GTSA’).
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Switzerland – Wealth Management Hub
• NBAD, which also has a full private banking operation in the UAE, has made its Swiss Bank the centre of gravity for its global private banking business, in order to meet the preferences of Arab investors towards
Switzerland as their private banking hub.
• Arab Clients are attracted to banking in Switzerland due to :
– International reputation for effectiveness, efficiency and discretion.
– Long tradition of political and legal stability.
– Long tradition of services to high-end clients (hotels, watchmaking and healthcare).
– The service quality and range of offerings from experienced personnel (wealth management as opposed to product selling).
– Client confidentiality is considered important for protecting their privacy. 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-driven banking secrecy, but rather privacy in their financial affairs and wealth management.
– For clients preferring investments according to Sharia rules, Private Banks, whilst being traditional, can offer access to several Islamic products (such as Sukuk, Funds not investing in alcohol, arms, etc).
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Switzerland – Wealth Management Hub
• Geneva has some additional points:
– With a resident population that is around 40% foreign, Geneva is a melting pot, welcoming to all cultures and religions with the vitality that openness implies.
– Many Middle East clients spend summer vacation in Geneva and surrounding areas (over 80% of
Geneva 5 star hotel rooms in July and August are occupied by Middle East visitors).
• The one negative point for Arab clients is the stamp tax duty on transactions in Switzerland. They do not have to pay this if they purchase through their accounts in the UAE, Singapore, etc.
• Finally, it is not just a one-way street. For example, NBAD Geneva has welcomes Swiss and European institutions / private investors who wish to place part of their asset allocation into the MENA region.
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Switzerland – Wealth Management Hub
• From the viewpoint of the Bank, Switzerland is a very attractive location to base a Private Bank, due to:
– The Swiss financial market place is a centre of competence for Private Banking, with a high concentration of banks and asset managers in financial hubs such as Geneva. Nearly one-third of the world’s offshore private assets are managed from Switzerland.
– Geneva has around 130 banks (of which 60 are foreign banks) and over 3,200 financial intermediaries,
850 asset managers, numerous lawyers, fiduciary experts and consultants. This cross-fertilization is an engine for growth.
– For Banks following an open architecture approach this leads to good access to other investment products and service providers.
– It also ensures a large pool of highly specialised and experienced private bankers (for example in
Geneva, around 15% of the population are employed in the financial services industry) and it is a magnet for the brightest talents in the wealth management world.
– A very high quality of life exists, which assists in attracting and retaining talent.
– First rate communications, access and infrastructure.
– In general, compared to non GCC countries, an attractive tax system.
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Switzerland – Wealth Management Hub
• Switzerland is still a highly attractive financial centre for Middle East clients.
• The main negative point is the stamp tax levied on transactions.
• Due to client demand for Switzerland, as well as the excellent infrastructure, highly experienced banking personnel and stable environment, Switzerland remains the location of choice for private banking operations.
• This is evidenced by the growing number of Arab Banks present in Switzerland, as well as the number of other Swiss based banks moving their focus more towards the Arab HNWI market.
• The role of Geneva as a capital of Trade Finance (especially commodities) is also very strong, and makes
Switzerland one of the leading centres for trade finance and banking services.
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