ONE IN FIVE

UAE, Dubai 2013 | FINANCE | INTERVIEW

TBY talks to Tarek Elrefai, Senior Executive Officer & Head of Client Management for the MEA region, BNY Mellon, on the growing centrality of Dubai for the region's finance industry and the potential of the local capital markets.

Tarek Elrefai
BIOGRAPHY
Tarek Elrefai is the Senior Executive Officer for BNY Mellon’s Dubai branch located in the Dubai International Financial Centre (DIFC) and Head of Client Management for the MEA region, overseeing country management and franchise clients in the Middle East & Africa. Elrefai has worked for BNY Mellon for 23 years, covering Egypt, North Africa, Levant, and the Gulf, and was appointed Regional Executive for Egypt and North Africa in 2006, before relocating to Dubai. Elrefai is the Chairman of the MEA Revenue Council and also Co-Chairs the Islamic Finance Committee. He is also the Vice-Chairman of the Banking Committee at the American Chamber of Commerce in Egypt and is Vice-Chairman of the British International School in Egypt.

Could you tell us about BNY Mellon's presence in the Middle East?

We've been in the Middle East for 100 years, having started with the Ottoman Bank in Turkey. We have two major lines of business right now: asset management and asset service. On the asset management side, we manage close to $1.2 trillion in assets through 17 investment boutiques, each of which has adapted special investment guidelines that can differ completely from the others. Thus, we can accommodate all of our clients' needs through our diversified services. In terms of our asset service line of business, we are the world's largest global custodian, with $26 trillion in assets under custody. We do cash-and-trade with banks, we open accounts, and we provide trade finance in the region. We also have a trust business and are one of the largest trustees in the financial world. We conduct a deposit receipts business for capital markets, where we take several companies in the local stock exchange and help them get listed on a European stock exchange or the London Stock Exchange. Put simply, we manage or service one dollar in every five dollars in the finance space. So, considering our model, Dubai is really a fantastic location for us. We cover the whole region from Dubai, where our product specialists are located and we also have an office in Abu Dhabi. The regulatory environment here in the UAE is very healthy.

When we look across the range of products and services, where do you see the most demand within the UAE itself?

The service sector is really expanding. Local companies are making good ratios, and this will encourage the capital markets to grow and open for foreign investors. Dubai has come through the global crisis well, real estate is recovering, and the service sector is going very well. This will all have a good effect on the capital markets.

Would you say Dubai has very flexible visa arrangements and very positive labor laws as well?

Yes, that's a good point. There are also the regulatory and compliance standards that Dubai has implemented. The Dubai International Financial Centre (DIFC) has a very strong regulatory body that monitors business, the Dubai Financial Services Authority (DFSA). Supporting our institution to be based in and outside the DIFC was the Central Bank of the UAE. Regulation and compliance is very important for our business model.

“We manage close to $1.2 trillion in assets through 17 investment boutiques."

Do you see a flow-in effect in when other global companies open an office here in Dubai?

Not at the time we opened, but I have noticed that Dubai is increasingly taking advantage of the recent changes in neighboring countries. Dubai is positioning itself as a safe haven in terms of trade finance, project finance, and real estate for the region. There is business coming from Syria, Egypt, and Lebanon. Thanks to its position as a safe haven, its good business and regulatory environment, as well as its geographical location, Dubai is really emerging. Dubai is taking advantage of its importance and benefits for countries in transition around it.

How have you seen local banks develop over the time you've been here?

They have continued to improve a lot, and they have recovered, for the most part, from the 2008 crisis. I see healthy ratios on balance sheets. I see good solutions of non-performing loans, and I have seen good compliance departments built over the last few years. I see many of them taking compliance more seriously now.

What is your outlook regarding BNY Mellon's operations in Dubai?

We are waiting for market development here. We expect the next market development to be on the capital markets side, by opening them up to foreign investors through the offering of more Depositary Receipts programs. We are expecting the capital markets to be the star in 2014.