Strategic Treasury

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Expanding in MENA: The Deutsche Experience

by Isaac Thomas, Director, Trade Finance/Cash Management Corporates,
MENA Region, Global Transaction Banking

Despite the global recession, the Middle East and North Africa (MENA) continues to be a region of attractive business opportunities. Deutsche Bank is one of the few international banks that is strengthening its commercial and transaction banking presence in the region. Isaac Thomas, Regional Head of Trade Finance and Cash Management Corporates, talks about 2008 and prospects for 2009.

What were the highlights in 2008 for Deutsche Bank’s corporate business in trade finance and cash management in the MENA region?

There were several highlights, but the biggest one was Deutsche Bank’s decision to build up a specific corporate cash management and trade services team for the region.

My mandate has been to increase the profile of the corporate cash and trade business for Deutsche Bank in the region. We knew that to achieve this, we needed a combination of both internal preparation and market awareness. As a result of the work we have done, we now have a clearly defined Middle East and North Africa strategy for the future. Our senior management is convinced of the growth potential and very supportive of the sustainability of business in the future. As the business in MENA grows, we see it as one of the key pillars of our regional transaction banking business.

Corporate cash management and trade business, as I see it, has been the unsung hero in most of the commercial banking activities in the world today.

From a client interaction perspective, it was important that a regional sales contact be established for our existing small but demanding set of clients. This has helped our business development immensely in 2008 as evidenced by our extremely strong growth in the cash and trade corporate network business from our MENA clients.

Corporate cash management and trade business, as I see it, has been the unsung hero in most of the commercial banking activities in the world today. Given our existing client base, we are in a unique position to extend our cash and trade business to further broaden our base and deepen our proposition with clients globally across the network. I believe we were very successful with this in 2008 and we plan to further exploit these opportunities in 2009 and beyond.

I am also confident of the potential for the commercial banking business in the Middle East. We have the right set of products, service and implementation culture and the technology to compete actively when the market recovers from the current crisis now that we have local capabilities established.

What was Deutsche Bank’s primary motivation for expanding into this market given the current climate?

There were - and still are - several important factors behind this. Firstly, many of our existing clients in Europe and Asia that conduct business in MENA have been requesting that we expand our presence here in order to partner their growth aspirations in the region.

The Middle East has been one of the fastest growing regions in the world in recent years, and although growth has slowed, it is a region that is relatively less exposed to the global crisis when compared to other economies. We continue to see multinational corporates setting up offices in this region, which need international banking partners. Countries like UAE and Saudi Arabia have benefitted from unprecedented foreign investment in the last 3-4 years. While some projects have been affected, this region continues to attract investors with large project and trade opportunities. Corporate trade continues to go from strength to strength given their focus on trading, re-exports between Asia and the rest of the world, and the oil related business. Banks that have a close partnership with these key clients will continue to see strong growth even in these tough times. We see this as an important business reason to be based locally and active in the markets.

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