RIYADH, 2 May 2006 — Deutsche Bank is set to join a whole host of other international names to enter the banking field within the Kingdom of Saudi Arabia. The recent opening up of the Saudi banking sector has allowed banks to enter either as local joint-venture companies with an increased foreign cap of 60 percent or to open as separate entities. Deutsche Bank has opted for the latter.
Currently, Deutsche Bank’s license only extends to a Riyadh presence.
“We intend to expand into other major cities such as Jeddah and Dammam, but we also have to learn to walk before we can run,” said Pierre de Weck, the global head of Deutsche Bank’s Private Wealth Management, in an exclusive interview with Arab News. “The Riyadh venture is a high-performance operation and we have to devote time to perfecting it before we focus on any kind of expansion. As most of our clients are not retail and are mainly high net-worth individuals, the geographical proximity factor is not so important.”
When asked about the competition that Deutsche Bank expected to face with the recent entry of 10 foreign banks having been given licenses and 11 existing local entities, he said, “There is undeniably tough competition that we are up against, but it is always good for the market. Foreign banks definitely don’t represent a threat to us as we have a different skills base and different views on the market.
What we are hoping to do is to contribute to raising the overall level of professionalism. The existing banks, however, present a different case because they have strengths in retail and also an excellent reach into the local market. Deutsche Bank has its strengths in product know-how, financial product engineering and the distinct ability to link the Kingdom effectively to the global market.”
Saudization seemed to be an issue of great importance to De Weck and he was categorical in voicing his faith in hiring Saudi nationals to fill key positions within the bank.
“In Saudi Arabia there exists excellent local talent in terms of those who possess an extensive knowledge of the markets and regulations that are present here and those who have very strong relationships with a diverse client base,” he said. “At Deutsche Bank our game and aim is to marry this talent with a strong analytical approach characteristic of operations globally. We have come here in order to increase our penetration within this market and deepen existing relationships with our clients. This is why our Saudi staff will play a pivotal role in the realization of this important objective.”
The initiative of the government to encourage employment of women also coincided with the policy of Deutsche Bank.
“Our organization has placed a huge emphasis on diversity when it comes to our employees. We already have a good mix of nationalities and genders and I don’t perceive that there will be any exception here,” said De Weck. Deutsche Bank also plans to invest in its Saudi work force by providing its employees with a range of continuous training programs.
“This is a very integral part of our success in business. We have globally run programs that our local staff will also benefit from in all aspects of our banking business such as financial markets, areas of selling and negotiation as well as more specific training in financial systems. We really believe in giving something back.”
The huge demand for Shariah-compliant products was also an area that Deutsche Bank sought to become a leader in.
“We already have active Shariah-compliant products offshore but we are now aiming to extend these into onshore Saudi markets and are seeking a stronger participation in them across all geographical regions and jurisdictions.” In light of the considerable competition that Deutsche Bank will inevitably face, De Weck said, “We will be providing access through our onshore activities in terms of global investment solutions and on the corporate side more support for Saudi clients to business opportunities beyond the Kingdom.”
Lastly when questioned about his perceptions of the Saudi market and the country itself, he said, “It is of course the largest in the region characterized by strong economic growth, wealth creation and very important entrepreneurial families. It has a well-regulated banking system, dependable regulations and good practices in terms of compliance.
“I must say that for the two days that I have been here in preparation for the opening ceremonies, I have been overwhelmed by the extremely friendly and generous welcome that I have received. I would like to take this opportunity to thank the Saudi business community and regulation committee for the full support they have provided.”