Special Report: Banking - Private banks beat financial turmoil

The boom of the past five years, however, has led to a change in practice, with Gulf investors choosing to plough their money into the global financial system, investing in high-return but riskier products.

As a result, many Gulf investors have been stung by the collapse of the world’s investment banks.

Private banks have not escaped the effects of the credit crunch, but last year shrugged off heavy sub-prime writedowns to enter 2008 in good health.

Assets under management are growing steadily, and Gulf banks are quickly realising that private banking is holding up well. A series of private banks, such as Germany’s Dresdner Bank, have entered the region over the past 12 months, and now local banks are moving aggressively into wealth management.

For now, they are not going head to head with the international players. National Bank of Fujairah has introduced a wealth management service targeted at clients with several hundred thousand dollars to spare, compared with Citi’s $5m threshold.

The priority for local banks now is to establish trusted client relationship managers if they are to succeed in this promising sector.

List of stories:

• Confidence in Gulf banking sector ebbs away

• Private banks prove their worth in the Gulf

• Interview with Arab Banking Corporation’s Hassan Ali Juma

• Banking liquidity shortage triggers Gulf price war

• Credit crunch tests Algiers’ immunity

• Moroccan banks building a presence in Africa