Singapore-based DBS Group Holdings is planning to expand its operations in Dubai to strengthen its presence in the Middle East region.
“We are revisiting the thesis that there is real opportunity to do more stuff out of Dubai and this region,” Bloomberg quoted CEO Piyush Gupta saying at the Dubai FinTech Summit.
The senior banker also noted that Southeast Asia’s largest lender’s presence in the region is currently limited, presenting a “significant opportunity to scale it up.”
“Dubai is becoming a preferred destination for hedge funds and financial firms due to its ease of doing business and tax-free status,” the Bloomberg report added.
Piyush Gupta also mentioned that Dubai can serve as a “neutral player in a multipolar world,” facilitating financial flows between the West and the East.
“Dubai can serve as a neutral player in a multipolar world facilitating financial flows between the West and the East,” Piyush Gupta noted.
“Taking advantage of the south-south trade and the capital flows by leveraging its presence in Dubai to me is the low-hanging fruit first,” Piyush Gupta remarked, while talking about DBS’ plans for the region in the next five to 10 years.
DBS is among several banks, hedge funds and other financial institutions that are looking to boost their presence in Dubai and use their base in the emirate to access business in other regional markets including Saudi Arabia, the Arab world’s biggest economy.
Dubai International Financial Centre (DIFC), one of the biggest financial hubs in the Middle East Africa and South Asia, has emerged as the home to 17 of the world’s top 20 banks, 25 of the world’s top 30 “systemically important” global financial institutions and five of the world’s top 10 global insurance companies.
The emirate’s direct connectivity with Asia, Africa, the Middle East and markets in Europe, along with the ease of trade and capital flows to and from the emirate to these regions, is making it a favoured destination for financial institutions.
DIFC grew at a record pace in 2023, with the number of active registered companies climbing by 20% while its annual revenue exceeded Dh1 billion (USD 288 million) for the first time. The centre now has a pipeline of more than 50 hedge funds, with more than USD 1 trillion in assets under management that are waiting to be licensed, DIFC governor Essa Kazim said in February 2024.
Total banking assets booked in the DIFC hit USD 199 billion at the 2022 end, while wealth and asset management portfolio managers in the centre invested USD 164 billion in 2023.
Talking about DBS’ presence in the UAE, the banking giant established its DIFC operations in 2006, becoming the first Singapore-headquartered lender to receive a licence to operate from the centre.
It is offering wholesale banking products and services including corporate and investment banking, debt and capital markets, treasury management, institutional equity sales and global transaction services in the Gulf nation right now, apart from catering to private banking customers in the region through its Dubai base.
In 2010, DBS’ licence was upgraded to category 1, which permits the lender to book loans and carry out trade finance activities locally.
DBS and Dubai-based lender Mashreq, in June 2024, announced a collaboration to allow the Middle Eastern bank’s retail customers to make same-day, near-instant cross-border payments in certain markets.
The service, powered by DBS’s cross-border payment solution that covers up to 132 currencies across 190 markets, will allow Mashreq’s retail customers to make peer-to-peer international payments in selected markets across the Asia Pacific, Europe and the Americas.
“Demand for e-commerce transactions has increased across the globe, with global cross-border payment flows also projected to exceed USD 250 trillion by 2027, up from almost USD 150 trillion in 2017,” the two banks said in a statement.
“Global cross-border payment flows have surged as businesses, investors and talent pursue opportunities in new markets. Our longstanding relationship with Mashreq aims to facilitate the seamless flow of capital, ultimately benefiting businesses, end-consumers and communities” said Terence Yong, global head of sales, global transaction services at DBS Bank.