ABN Amro moves private banking arm to DIFC

ABN Amro Bank has moved its Middle East private banking operations to the DIFC and it will now be regulated by the Dubai Financial Services Authority (DFSA).

The move entails more constraints in taking deposits in the dirham environment, but its regional chief said the private bank is still in a "comfortable situation".

The bank was granted a Category 1 licence from the financial regulator DFSA.

The licence allows a firm to offer a wide range of services, including accepting deposits, providing credit, offering a variety of trust, custody and investment services, as well as investment advisory and collective investment fund activities.

However, such a firm cannot accept deposits from the local markets nor accept deposits in the local currency. Although it can provide credits to local markets, it cannot provide it in dirhams.

"Category 1 allows us to book onshore. Are there restrictions? Yes. Are they difficult for us? Not at all. We don't see an issue," Hassan El Nahas, Head of Private Banking Middle East, told Emirates Business, adding that the bank would continue to book its clients in Dubai, Singapore or Geneva.

"From asset-under-management perspective, the impact of moving away from dirham was little," he said. "Also, our deposits are very low. The dirham has never been a large percentage of our deposit base, because we are not competing with the local banks, which was our intention even before we moved to DIFC, given their scale and their ability for pricing."

ABN Amro's move to the DIFC was primarily a result of the ownership structure from a consortium of banks to being fully owned by the Dutch Government, effective from April 1 this year.

There is a trend of private banking businesses using their base in DIFC as an alternative booking centre for their global clients, said Abdulla Mohammed Al Awar, CEO of DIFC Authority.

ABN Amro Private Banking is part of the ABN Amro businesses acquired by the Dutch state in 2008.

It operates in 12 countries across Europe, Asia and the Middle East, managing €120 billion (Dh595.12bn) of assets.