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BANKING
Banking the
German way
The German banking industry in the UAE grew dramatically in size and scope
before the financial crisis. Today, these resillient firms share how and where they
continue to find opportunities in the Middle East. - By Sara Hamdan
From the glossy halls of the Dubai International
Financial Centre to dedicated space in free zones,
the German banking industry has gradually
increased its regional scope over the past five
years. As trade relations between Europe and
the Middle East and North Africa grew, most of
Germany’s banking powerhouses began opening
branches in the region.
This accelerated during the boom years of 2006
and 2007, with most of the prominent banks
turning to Dubai as a hub to service the rest of the
Arab world.
Analysts say that European banks, and German ones
in particular, have strong growth potential in the
region. Although the Middle East markets are small,
fragmented, and still in the process of developing a
complete financial infrastructure, foreign
The Middle East has been
developing significantly over
the past few years and is now a
key market for the international
banking industry.
- Micheal Cohrs, Head of Global
Banking, Deutsche Bank
institutions were intrigued by lucrative opportunities
in frontier markets characterised by young
populations, oil revenues and strong fundamentals.
German banks that were among the first to open
local branches, including Commerzbank and
Deutsche Bank, showed that it was possible to
provide the right services for local clients and
navigate through financial difficulty during the
crisis of 2008.
Deutsche Bank, which has had an office in Dubai
since 2001, opened another branch in the DIFC in
2006 in order to take advantage of the growing
opportunities in the region. The bank soon became
a founding member of the DIFX, the free zone’s
stock exchange, and was the first to list products
when it launched in September 2005.
“The Middle East has been developing significantly
over the past few years and is now a key market for
the international banking industry,” said Micheal
Cohrs, head of global banking at Deutsche Bank.
“This is an initial step in the bank’s growth plans.”
Commerzbank, Germany’s second largest bank,
opened its DIFC branch a year later in 2007.
Commerzbank provides banking services for
institutional investors in the Middle East, as well as
asset management services through Cominvest, a
wholly owned subsidiary.
Aside from offering conventional banking services,
Commerzbank also became the region’s first
specialist in international banking for real estate.
This catered uniquely to the local markets, as
real estate investing has had a strong tradition,
particularly in the Gulf region.
“The addition of Commerzbank to the DIFC’s
growing number of eminent financial institutions
will help strengthen ties between this region
and the markets of Europe,” said Nasser Al Shaali,
the DIFC Authority’s chief executive at the time
the bank opened. “Commerzbank is a respected
and influential force in global banking, and its
presence in the Middle East will significantly
invigorate the sector here.”
As these two institutions made headway in new
territory, the German banking industry began to
grow in size as other banks decided to expand their
presence in the region. In 2008, Landesbank Baden-
Württemberg, shipping giant HVB, and private
bank Dresden Bank were among the prominent
German banks to open branches in the UAE.
Most of these institutions used Dubai and the
DIFC as a hub from which to service the rest of the
region. For Landesbank, the focus of the business
was to provide consulting and financial services
to German medium-sized businesses entering the
regional markets, from Libya all the way to the
Arabian Gulf. Iran and Pakistan are also serviced by
the firm’s office in the DIFC.
Investors are demanding an
increasing exposure to MENA
investments, but historically they
have had little access to these
opportunities.
- Nazem Al Kudsi, CEO, ADIC
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