Private bankers in tax-free Dubai are earning 25 percent more than peers in Geneva and almost 40 percent more than colleagues in London, a survey by Dubai-based headhunter Dunn Consultancy FZ-LLC found.
Dubai's private bankers with at least 10 years experience are paid an average $276,500 in salary and allowances, compared with pretax earnings of $221,900 in Geneva and $199,100 in London, the Dunn Consultancy study, which excludes bonuses, showed. From June to August it surveyed 474 bankers from 20 lenders that have wealth-management units in all three cities.
``There's fierce competition for private bankers in the Gulf as banks hire locally and move teams from traditional hubs in Geneva and London,'' Matthew Dunn, chief executive officer of Dunn Consultancy, said in an interview. ``Pay is rising as more banks enter the region, but it's completely unsustainable and has to slow down in the next two to three years.''
The private banks of Citigroup Inc., HSBC Holdings Plc and UBS AG are among the personal-wealth managers competing to look after the finances of Middle Eastern clients with at least $1 million of assets. Personal wealth in the oil-rich Middle East may rise to $2.2 trillion by 2011 from $1.4 trillion in 2006, Merrill Lynch & Co. and Capgemini SA said in their 2007 world wealth report.
The number of U.S. dollar millionaires in the region rose 12 percent to more than 300,000 last year, the report showed.
Tax-Free Center
``It's definitely a competitive market,'' Ramzi Abukhadra, a managing director in the Gulf for JPMorgan Chase & Co.'s private- banking unit, said in an interview from Bahrain. ``Over the past 12 to 18 months, institutions have been coming to the region at a much faster pace, and all are looking for talent.''
Dubai in 2004 opened the Dubai International Financial Centre, a self-regulated 110-acre business park designed to attract financial institutions to the Gulf sheikhdom. The center has since opened its own stock, bond, fund and derivatives exchange, and given licenses to banks including ABN Amro Holding NV, Credit Suisse Group and Deutsche Bank AG.
Dunn Consultancy included results from some Zurich-based bankers within the Geneva figures after finding no pay discrepancy between the Swiss cities, according to Matthew Dunn.
Sums paid to bankers for school fees, housing, club memberships and personal travel were included within the allowances tally. Bonuses were excluded because they vary ``enormously'' depending on performance, Dunn said.
Skills Shortage
Gulf bankers received the biggest pay rises in their industry last year as a regional skills shortage pushed up salaries and bonuses, U.K.-based headhunter Napier Scott Executive Search Ltd. said in a survey earlier this year.
Demand for bankers with private equity, merger and acquisition, Islamic finance and structured finance experience fueled pay increases of as much as 30 percent, Senior Consultant Bill Allum said in a March 27 interview. Salaries in Asia rose as much as 25 percent in the period, while U.K. and U.S. gains were 22 percent and 15 percent respectively, Napier Scott said, after surveying 10 global banks and 20 regional lenders.
``Many banks are building private-banking teams in Dubai to get closer to clients and to test the waters before bringing in a larger investment-banking presence,'' Dunn said.
Families own 92 percent of closely-held companies in the United Arab Emirates, the second-biggest Arab economy after Saudi Arabia, according to the Dubai Chamber of Commerce & Industry.
Of 93 publicly-traded U.A.E. companies surveyed earlier this year by The National Investor, an Abu Dhabi-based investment bank, 10 clans including the al-Qassimis, al-Dhahirys, al-Mazroueis and Al-Ghurairs hold 25 percent of all the seats on their boards of directors.
Oil Earnings
Six Persian Gulf states, including Saudi Arabia and Kuwait, that together control 40 percent of the world's oil, may earn $24 trillion from crude sales over the next 20 years, Brad Bourland, former chief economist for Samba Financial Group, said in May.
Inflation in the U.A.E. accelerated to 9.3 percent last year, the fastest pace since records began more than 25 years ago, on housing costs and a weaker currency, the Economy Ministry said on June 20.
The inflation rate rose from 6.3 percent in 2005 after new housing failed to keep pace with the federation's growing population and the central bank sustained the U.A.E. dirham's peg to the weakening U.S. dollar. Source
Dubai's private bankers with at least 10 years experience are paid an average $276,500 in salary and allowances, compared with pretax earnings of $221,900 in Geneva and $199,100 in London, the Dunn Consultancy study, which excludes bonuses, showed. From June to August it surveyed 474 bankers from 20 lenders that have wealth-management units in all three cities.
``There's fierce competition for private bankers in the Gulf as banks hire locally and move teams from traditional hubs in Geneva and London,'' Matthew Dunn, chief executive officer of Dunn Consultancy, said in an interview. ``Pay is rising as more banks enter the region, but it's completely unsustainable and has to slow down in the next two to three years.''
The private banks of Citigroup Inc., HSBC Holdings Plc and UBS AG are among the personal-wealth managers competing to look after the finances of Middle Eastern clients with at least $1 million of assets. Personal wealth in the oil-rich Middle East may rise to $2.2 trillion by 2011 from $1.4 trillion in 2006, Merrill Lynch & Co. and Capgemini SA said in their 2007 world wealth report.
The number of U.S. dollar millionaires in the region rose 12 percent to more than 300,000 last year, the report showed.
Tax-Free Center
``It's definitely a competitive market,'' Ramzi Abukhadra, a managing director in the Gulf for JPMorgan Chase & Co.'s private- banking unit, said in an interview from Bahrain. ``Over the past 12 to 18 months, institutions have been coming to the region at a much faster pace, and all are looking for talent.''
Dubai in 2004 opened the Dubai International Financial Centre, a self-regulated 110-acre business park designed to attract financial institutions to the Gulf sheikhdom. The center has since opened its own stock, bond, fund and derivatives exchange, and given licenses to banks including ABN Amro Holding NV, Credit Suisse Group and Deutsche Bank AG.
Dunn Consultancy included results from some Zurich-based bankers within the Geneva figures after finding no pay discrepancy between the Swiss cities, according to Matthew Dunn.
Sums paid to bankers for school fees, housing, club memberships and personal travel were included within the allowances tally. Bonuses were excluded because they vary ``enormously'' depending on performance, Dunn said.
Skills Shortage
Gulf bankers received the biggest pay rises in their industry last year as a regional skills shortage pushed up salaries and bonuses, U.K.-based headhunter Napier Scott Executive Search Ltd. said in a survey earlier this year.
Demand for bankers with private equity, merger and acquisition, Islamic finance and structured finance experience fueled pay increases of as much as 30 percent, Senior Consultant Bill Allum said in a March 27 interview. Salaries in Asia rose as much as 25 percent in the period, while U.K. and U.S. gains were 22 percent and 15 percent respectively, Napier Scott said, after surveying 10 global banks and 20 regional lenders.
``Many banks are building private-banking teams in Dubai to get closer to clients and to test the waters before bringing in a larger investment-banking presence,'' Dunn said.
Families own 92 percent of closely-held companies in the United Arab Emirates, the second-biggest Arab economy after Saudi Arabia, according to the Dubai Chamber of Commerce & Industry.
Of 93 publicly-traded U.A.E. companies surveyed earlier this year by The National Investor, an Abu Dhabi-based investment bank, 10 clans including the al-Qassimis, al-Dhahirys, al-Mazroueis and Al-Ghurairs hold 25 percent of all the seats on their boards of directors.
Oil Earnings
Six Persian Gulf states, including Saudi Arabia and Kuwait, that together control 40 percent of the world's oil, may earn $24 trillion from crude sales over the next 20 years, Brad Bourland, former chief economist for Samba Financial Group, said in May.
Inflation in the U.A.E. accelerated to 9.3 percent last year, the fastest pace since records began more than 25 years ago, on housing costs and a weaker currency, the Economy Ministry said on June 20.
The inflation rate rose from 6.3 percent in 2005 after new housing failed to keep pace with the federation's growing population and the central bank sustained the U.A.E. dirham's peg to the weakening U.S. dollar. Source
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