CBB creates new license category for private banking services

The Private Banking Licence caters to all activities related to banking, investment and financial services targeting high net worth individuals (HNWIs), with liquidity of at least $1m.

CBB's private banking licensees will be allowed to undertake a wide range of wealth and asset management services, including investment and advisory services, wealth management, financing and banking services, as well as inheritance and succession planning.

The new licence is a sub-category of CBB's Wholesale Banking licence category, said Mr. Ahmed Abdul Aziz Al Bassam, Director, Licensing & Policy, at the CBB.

"The creation of a licence category, specific to private banking services, is aimed at encouraging international and leading regional banks to offer sophisticated wealth management services, such as trusts and succession planning, family offices and investment advisory," he said.

The new CBB licence will provide market players a better measure of operational agility to deliver the increasingly higher levels of service demanded by increasingly sophisticated clients, said Mr. Al Bassam.

The enactment in 2006 of a Trust Law in Bahrain has also broadened the scope for private banks to take a more holistic approach to wealth management by also offering non-financial services, such as trusts.

"Bahrain is already host to a number of leading international and regional financial institutions specializing in wealth management," Mr. Al Bassam pointed out.

"The creation of the new licence comes within CBB's established policy of ensuring Bahrain's pre-eminence as a financial centre and enabling CBB licensees to meet the evolving needs of their customers."

The new licence, which is the first of its kind in Bahrain, will considerably facilitate the conduct of banking services targeting high net worth individuals, who require a sophisticated level of service.

"Such services are assuming increasing significance due to the economic boom currently underway in the GCC region and the wider Middle East region."

In addition to the increased new liquidity, the Arab region has, historically, been a region of considerable wealth, with the collective wealth of HNWIs estimated at $1.3 trillion, and forecast to grow to $1.8 trillion by 2010.

"The environment for wealth management services, thus, will remain lucrative for the foreseeable future," said Mr. Al Bassam.

However, the region's investors have become increasingly sophisticated investors, challenging private banks and wealth managers to provide innovative investment solutions, he pointed out.

Regulated activities under CBB's Private Banking licence comprise:

1) Investment Services:
Investment Advisory
Discretionary Services

2) Wealth Management & Planning:
Fiduciary Services
Wealth Solutions
Trust Services

3) Financing & banking (for non-residents only):
Banking services (such as current account and credit card facilities)
Providing Credits and Loans
Accepting Deposits

4) Specialist Advisory
Family Office Advisory
Corporate Finance Advisory
Wealth and Tax Advisory
Specialist Property Services

"The CBB remains cognizant of the dynamic nature of the financial services industry and is committed to supporting the continued growth and advancement of financial institutions based in Bahrain," said Mr. Al Bassam.