ZAWYA DOW JONES

DUBAI THE private banking sector in the Middle East and Africa may grow 6.6 percent a year to reach $6.1 trillion in value in 2016 as the gross domestic product of oil-rich countries in the region continues to expand, a study from Boston Consulting Group, BCG, shows.

The consultancy firm’s forecasts are higher than the region’s actual performance in 2011, when the Middle East’s market for the ultrarich slowed to 4.7 percent to reach $4.5 trillion, largely due to the political upheavals.

“The Middle East and Africa continued to grow but a more moderate rate than in previous years, owing particularly to political instability in the region,” BCG said. Saudi Arabia and Kuwait, oil exporters whose GDP grew at double digits, are the main drivers behind the increase. The study also shows that wealth in the region held in equities fell 2.6 percent, while the amount held in bonds rose by 13.3 percent.

The highest density of millionaire households in 2011 in the world was in Singapore, with Qatar, Kuwait, United Arab Emirates, Israel and Oman also making the top 15, BCG said.

The Middle East is also one of the regions with the most family offices after the US and Europe.

Globally, equity markets suffered in 2011 with Europe hurting the most. In the Middle East, Egypt’s stock market tumbled by almost 50 percent in 2011, BCG said.

As a result of the slowdown, many investment banks in the Middle East have trimmed back their operations.

But private banking houses in the region have continued to open up new offices and hire relationship managers.

International banks compete with their local counterparts for a slice of the region’s wealth.