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Bank of New York Mellon opens in Dubai

Posted: 01 July 2008

The Bank of New York (BNY) Mellon is expanding its operations in the Middle East with a new office at the Dubai International Financial Centre (DIFC).

The popularity of Dubai as a fund domicile has risen in recent years as the price of oil has soared and the windfall revenues have stayed in the Gulf.

BNY Mellon's, expansion is not a response to any losses or contraction in developed markets, says Hani Kablawi, managing director and the head of the Middle East and Africa operations at BNY Mellon. He said the bank had long focused on a ‘fee generating model and had not suffered directly from the subprime crisis. It derived more than 80 per cent of its revenues from fees.
‘At a time when some other financial institutions are retrenching, we are looking to grow and we are able to grow because we are still generating lots of cash,' he said.

Mr Kablawi predicted that the fund management industry "will grow at a pace that will exceed that of anywhere else in the next five years".

As the equity markets have expanded in the past decade, local banks have witnessed significant growth in their asset management operations. EFG Hermes, for example, began managing about $3bn last year, and now has more than $7.5bn in assets under management.

Mr Kablawi indicated that the bank aims to target the large pools of capital that sovereign wealth funds like the Abu Dhabi ¬Investment Authority control, and sees opportunity in fund administration.

The potential to offer administrative services to fund managers - a combination of custody and accounting - is a way to expand the banks offering to the region's local financial institutions.

BNY Mellon is also one of the world's largest asset managers, with assets under management of $1.1 trillon.

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