BNY Mellon expects Middle East business to outpace its global growth over next five years

BNY Mellon expects its Middle East growth to outpace the rest of its global business over the next five years, driven by economic progress in Saudi Arabia and the UAE, the Arab world’s two largest economies.

The US bank, which manages more than $2.3 trillion in assets, last year recorded “healthy, single-digit” annual organic growth across markets such as the Middle East and Africa. The growth was driven by new businesses.

“[The business] grows faster here in the region,” Hani Kablawi, chairman of BNY Mellon’s international operations, told The National on the sidelines of the fifth Future Investment Initiative forum in Riyadh.

“There are outsize growth opportunities in the region.”

The Vision 2030 programme in Saudi Arabia, Opec’s largest oil exporter, has “real, measurable plans underneath it”, which will lead to significant investments – both from within the region and globally, he said.

“You have a vision in Abu Dhabi, which is being executed” and there is “action happening in Kuwait”, as well as work happening in Oman that “we are close to and that we believe in”, Mr Kablawi said.

“I think it is true for the region but … nowhere truer than in the UAE and Saudi [Arabia].”

GCC countries are transforming their economies to reduce their reliance on oil revenue.

The opening up of the financial sector and measures to attract foreign direct investment are among the central planks of the region’s overhaul agendas across the region.

Foreign capital flows to regional capital markets, some of the world’s best performers, have increased amid continued reforms over the past few years.

GCC government and corporate issuers have also tapped into debt capital markets amid historically low global interest rates that have created more business opportunities for banks such as BNY Mellon. Interest in investing in the region is on the rise, especially in Saudi Arabia.

The kingdom’s Capital Markets Authority is “driving the right conversation with the private sector globally to make sure that the market here is attractive for foreign investment”, Mr Kablawi said.

It is clearing obstacles and “I believe there is more money coming to the region in the next five years, both into private and public markets”, he said.

The broader Middle East is “a very important part” of the bank’s global operations, said Mr Kablawi, who has been associated with BNY Mellon’s Middle East business since 1997.

“It was significant in 1997 and it only got more significant since then and that is year after year of growth. We have not had a single year of decline in our business,” he said.

“It is a holistic statement” across everything that the bank does, including trade finance, payment flows, custody operations, investment and asset management services, as well as helping regional issuers of debt and equity access global markets, he said.

The bank’s client base includes sovereign wealth funds, regional central banks, commercial lenders, insurers, regional pension funds and corporate issuers.

In terms of the investment management business, BNY Mellon’s clientele is interested in due diligence on environment, government and social standards and an understanding of “the dynamics of underlying investments in companies at the individual security level and in portfolios or funds at the aggregate level”, Mr Kablawi said.

[BNY Mellon’s business] grows faster here in the region. There are outsize growth opportunities in the region

HANI KABLAWI

BNY Mellon executive