The Middle East private sector banking business for JP Morgan Chase and Co is set to record double-digit increases for 2011 as this American bank enlarges their regional footprint to cover the mega-rich market.
Revenue grew at double-digit rates in 2010 and the bank has begun to target a regional investor class that has become more averse to risk and exhibiting added caution after the economic crisis.
Managing director at the Middle East private banking department for JP Morgan, Paolo Moscovici noted that patience and perseverance are needed in this region. He stated that a firm needs to remain on course.
Moscovici noted that this is a tough challenge when it is still necessary to present logical business numbers each year.
The private bank of JP Morgan has assets totaling about $700 billion around the globe and services the wealthy members of society. Family run firms and those who are worth at least $100 million and up to and beyond billions of dollars are included in that target market.
The Middle East saw the wealth of the area erode drastically over the course of the economic crisis when the price of oil dropped and family run companies took hits after being exposed to large debts and toxic assets.
Moscovici noted that to navigate the stormy economic climate firms had to guide investors to diversified portfolios and source out fresh opportunities for investments.
Regarding equities, Moscovici said that the bank had returned to positions that were set for growth as the globe recovered from the recession, emerging markets for example.
Dealing with clients in the Middle East is vastly different from working with the wealthy New Yorkers or Texans, according to Moscovici. In comparison, the portfolio of a US investor would normally be made up of 1 to 2 percent emerging market investments, while in the Middle East that figure falls between 15 and 20 percent.
Moscovici noted that investors in the East have traditionally been more open to investing in emerging markets. Within the Middle East private banking sector there are several players like Credit Suisse and Julius Baer (pure-play banking institutions) in competition with global banking organizations such as UBS and HSBC for a portion of the oil wealth.
Even with the growth rates reaching double digits Moscovici stated that the Middle East will lag behind the rates experienced in rapidly expanding markets like Asia. In these regions private bankers are expanding at incredible rates to accommodate the fast pace of newly formed millionaires.
Moscovici said that it is difficult to grow at a rate of 25 percent. Staying within the range of 10 to 20 percent is more sensible and manageable according to the managing director. Hopefully this positive news will bring more private banking jobs in to the region too.Paul Holdsworth, Staff Writer, Gulf Jobs Market News