Dubai’s DIFC grows 16% in first half

The Dubai International Financial Centre said the number of companies based in its hub rose 16% during the first half of this year with financial services companies its largest group.

The rise comes despite lower oil prices, slowing economic growth in the region and global financial problems emerging, ith more than 1,500 (1539) companies, including 425 financial firms (an increase of 11% on this time last year), now based in the tax-free business park, DIFC said in a statement.

The number of overall employees in the centre has also increased 14% to 21,000, the DIFC said.

Newly registered financial firms included companies taking the hub’s highest category licenses, such as HSBC, which announced it was moving its Middle East headquarters and US$40bn of assets to the DIFC. The first six months of 2016 also saw regional banks join the DIFC, including Ahli United Bank Limited – the first GCC bank to receive a Category 1 (full branch) license – and Bank of Palestine, which set up its first overseas operation.

Indian reinsurance

In other financial sectors, the centre said that it welcomed its first Indian reinsurance firm, HDFC International Life and Re Company Limited, to its portfolio, along with Kuwaiti asset management firm, KAMCO Investment Company Limited, which established its first international office in DIFC.

The rise is also made all the more significant give the fact that slowing economic growth in the region the fact has forced some banks in the UAE to cut jobs.

‘Major milestone’

DIFC governor Essa Kazim, said, “Dubai and DIFC serve as the gateway to the world’s fastest growing markets across the MEASA region.  This is reflected in our latest results and initiatives, which represent a major milestone in delivering on the Centre’s forward-looking 2024 strategy.”

“We continue to invest in building our world-class ecosystem, and are committed to creating an environment that enables our clients to take advantage of new opportunities that arise in the region.”

With 2.6m people estimated to be based in the city, Dubai’s status as a regional banking centre began after opening the DIFC in 2004 to attract international banks, asset managers and insurers with promises of zero taxes for 50 years. Firms such as Goldman Sachs Group and Citigroup have their regional offices there.

The centre is facing growing competition from cities such as Riyadh and Doha, which are also setting up their own financial hubs. The UAE capital set up the Abu Dhabi Global Markets free zone in 2013 and has ambitions to develop it into a global financial business hub.

Saudi Arabia

As reported here, Saudi Arabia is also developing the US$10bn King Abdullah Financial District, which so far has struggled to attract any major banks.

As reported by Gulf News, of April, not a single financial institution had agreed to take space in the 73 buildings the Saudi state is constructing at the KAFD, according to Waleed Aleisa, chief executive officer and project manager of the district at developer Al Ra’idah. The one lender on the 1.6mn square-metre (17.2mn square-foot) site north of the city centre is Samba Financial Group, which bought a plot of land and is building its own tower.

ABOUT THE AUTHOR
Gary Robinson
Deputy Editor, International Investment and Head of Video at Open Door Media Publishing. A fully qualified journalist and filmmaker with more than 20 years' financial services experience, both as journalist and originally as an IFA.

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