Saxo Bank eyeing growth in Middle East and Africa; opens 2nd UAE office, stock market flotation next?

Lars Seier Christensen

In a report by Reuters, Saxo Bank expects the Middle East and Africa (MEA) to contribute around 15% of its total revenue within five years, as the specialized investment bank looks to tap the region’s growing wealth, its co-founder and chief executive said on Wednesday.

Speaking as the Copenhagen-based bank opened an office in Abu Dhabi, its second in the United Arab Emirates (UAE), Lars Seier Christensen said the bank’s revenue in the region had already grown to 10% of the group total from between 3% and 4% in 2009.

“This region has great concentration of wealth and a stronger regulatory environment now,” Christensen told Reuters. “From our perspective, we are hoping to take revenues from this region to 15 percent (of total revenue) in the next three to five years.”

Abu Dhabi, the oil-rich capital of the UAE, is spending billions of dollars on industry, tourism and infrastructure, and is creating a new financial free-zone to draw in global firms, similar to the Dubai International Financial Centre (DIFC).

Saxo, in which private equity firm TPG Capital has a 30% stake, is among the world’s top 30 foreign exchange banks, based on volume transacted, and one of the biggest in retail forex trading. Its rivals include FXCM Inc and Interactive Brokers Group Inc.

But it is looking to diversify into other asset classes, co-chief executive Kim Fournais told Reuters last year.

Saxo opened its first UAE office in Dubai in 2009 and is looking to tap private investors and institutional clients in Abu Dhabi and nearby markets with its online trading and multi-asset products, Christensen said, as part of a strategy to expand in emerging markets due to slower growth in Europe.

The bank is also moving more towards serving wealthier clients as well as small-to-medium hedge funds and private clients, a segment Christensen said was ignored by big investmentbanks. Saxo has traditionally focused on retail traders.

“There’s an interesting gap there for us which is under-serviced,” he said.

He said Saxo could launch a stock market flotation in three years’ time, adding the bank would like to prove the value its strategic initiatives first to extract the best share price.

“It depends on many things – the markets, whether it is the right point … a realistic time would be three years,” he said.

An issue could probably be launched in Copenhagen. “We are a bigger fish in a small pond and it could generate more interest in the stock,” he said, declined to estimate the bank’s current value but noting it was valued at $2 billion in 2011.

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