Rothschild Expands Middle East Wealth Business with New Deal
Rothschild & Co is growing its wealth management business in the Middle East. The firm struck a deal with Liechtensteinische Landesbank (LLB), which is retreating from the UAE market. This move reflects how international banks are strengthening services for rich clients in the Gulf region.
LLB Retreats, Rothschild Gains Middle East Clients
LLB opened a wealth management division in Dubai only last year. Now, it will transfer its Middle East clients to Rothschild as it pulls back from the UAE. If clients accept Rothschild as their new wealth manager, the bank could gain up to SFr1 billion ($1.2 billion) in assets.
Growing Ultra-Wealthy Presence in the UAE
Many ultra-wealthy individuals are moving to the low-tax UAE. This migration comes as tax regimes in Europe and the UK change. Lawyers and advisers report this trend is driving demand for wealth management services in the region.
Rothschild Sees Major Growth Opportunity
Laurent Gagnebin, Rothschild’s CEO of wealth management in Switzerland, called the deal “a decade of growth in one go.” He said he expects clients to stay with Rothschild. The bank already operates investment banking and alternative investments divisions in the Middle East. These units complement its wealth management business and set Rothschild apart from other Swiss private banks.
Swiss Banks Expand in the Middle East
Other Swiss banks, including Lombard Odier, UBS, Julius Baer, and Pictet, also have a presence in the region. Many are expanding their operations. Several Swiss family offices have relocated to Dubai recently. This shift follows tighter regulations and higher taxes in Switzerland.
Confidence in the UAE’s Wealth Potential
Alexandre de Rothschild, the bank’s executive chair, expressed strong confidence in the UAE. He pointed to the growing concentration of wealth in the region as a key opportunity. Rothschild will also take over LLB’s Dubai office.
Staff and Competition in Dubai
After the deal, Rothschild’s Middle East wealth management team will have 25 employees. Twenty of them will come from LLB, which opened its UAE offices in Abu Dhabi and Dubai over the last 20 years. However, private bankers warn that competition for qualified talent in Dubai is fierce due to a rush of firms entering the market.
Challenges Ahead Despite Long History
Despite 20 years in the UAE, LLB decided to leave. The bank will focus on clients closer to home in Liechtenstein, Switzerland, Austria, and Germany. LLB is listed in Switzerland and has a market capitalization of SFr2.6 billion.
Rothschild’s Global Reach and Assets Under Management
Rothschild employs 4,600 bankers in 40 countries. Its asset management division oversees €38 billion. The alternative investments unit, Five Arrows, manages an additional €29 billion.
