DUBAI: Michael Philipp, a former Credit Suisse banker and the newly appointed head of Dubai’s Shuaa Capital is eyeing a turnaround at the struggling investment bank by shifting focus to high-networth and institutional clients.
Philipp, previously chairman and chief executive officer of Credit Suisse’s Europe, Middle East and Africa business and earlier Middle East, Africa head at Deutsche Bank, was hired to the top job at Shuaa last week, replacing Sameer Al Ansari.
One of the Arab world’s largest investment banks and once symbol of the sector’s potential in the region, Shuaa was hit by the global financial downturn, with asset impairments erasing profits. Its stock has fallen 37 percent year-to-date.
"After more than 20 years in banking, I had more or less decided that I was finished with financial services, but to build a regional financial services business is an interesting challenge for me," Philipp told Reuters in a telephone interview on Thursday.
Philipp said the firm would now emphasize offering asset management and advisory services to rich individuals, family groups and institutions in the region, shifting its focus away from retail customers.
"We want to create a regional investment platform. It’s something at which no global bank has succeeded so far in the region," he said.
Shuaa will look at regions where it has existing licenses to operate like Saudi Arabia, UAE and Kuwait, Philipp said.
The company posted a small second-quarter net profit in July, helped by aggressive cost cuts and strength in its asset management business but it has struggled to grow its revenues which have rapidly fallen amid slumping trading volumes and lack of capital market activity.
Tough task
Investment banks operating in the Middle East have seen their fees dwindle sharply as companies have backed out of plans to raise debt and make acquisitions in the backdrop of a bleak outlook for the global economy.
Overall investment banking fees declined by 35 percent to $316.6 million in the first nine months of the year, compared with $483.8 million in the same period last year, Thomson Reuters data showed.
Local banks like Shuaa, EFG Hermes and Global Investment House have faced increased competition from global banks.
Philipp, a personal friend of Sheikh Maktoum Hasher Al Maktoum, a member of the ruling family in Dubai and Shuaa’s chairman, said the task would not be easy amid the gloomy outlook for economy and investment banking globally.
"It takes around 18 months to change reputation and three to five years to build a stable business. I am not trying to change this overnight," he said.
He said the company still planned to carry out acquisitions even though he did not see one imminently, and said that he would definitely consider committing his own money to Shuaa’s business in the future.
Last month Shuaa, which helped float ports operator DP World, said it was in talks with a number of target companies after sources told Reuters that the company was eyeing brokerage buys in Egypt.
