Commerzbank, Germany’s second biggest bank, has identified asset management and real estate finance as key areas of growth for the Middle East and North Africa (Mena region).

Corporate and investment banking will further fuel its growth, the bank said in a statement.

The bank has predicted steady but clear growth for its operations in the Middle East in 2008, following on from the recent opening of its regional headquarters in Dubai.

Commerzbank’s strategic expansion to become a fully integrated European bank, partly through the 2006 acquisition of Eurohypo AG, has opened up new growth channels for the Middle East.

According to Ralph Nitzgen, senior executive officer and general manager of Commerzbank’s Dubai branch, Commerzbank can offer a truly integrated response to the region’s continued need for infrastructure and real estate finance. The real estate project market in the Middle East is estimated at $2.4 trillion.

Nitzgen said: “The huge number of real estate projects in the Middle East, as well as increasing investment flows into developed markets such as Europe, has resulted in a rise in demand for our services.

“The opening of the Dubai office was one of the first major strategic moves following our evolution into a fully integrated banking group. By early 2008, we anticipate a full return on investment of setting up the Dubai operations and predict record levels of business in the region.”

Commerzbank was awarded its banking licence by Dubai Financial Services Authority (DFSA) in September this year, and is based at Dubai International Financial Centre (DIFC). The new branch was the result of more than 50 years’ presence in the Middle East to date.

Through the regional headquarters of its parent company, Eurohypo has become the first international specialist bank in the Middle East to offer expertise in European real estate investment markets as well as structured real estate finance solutions. As a result, the group can now offer two-way investment opportunities between Europe and the Gulf.

Investors from the Gulf are also diversifying into new sectors and new markets to take advantage of high levels of liquidity, said Nitzgen.

The team in Dubai features access to the group’s subsidiaries, including a strong asset management division, as well as a division specialised in structured finance for corporates and markets, to meet the demand from existing – and new – clients.

Nitzgen said: “The appeal of rapidly developing markets such as the Gulf has been highlighted against the corrections underway in established markets such as the US. With the high-profile investments by Middle East sovereign wealth funds, institutional investors and family offices, emerging markets are currently beating developed markets hands down.

“The region’s asset pool is estimated at $2.7 trillion, with up to 80 per cent of that as oil-based. Recent statistics estimate that 50 per cent of these assets are invested in fixed investments, 40 per cent in equities and 10 per cent in alternatives.

“Real estate continues to be the most vulnerable of the asset classes, while the best returns should be in hedge funds and commodities. The spread of services incorporated within the Commerzbank group enables us to partner with clients across a wide range of activities.”

Commerzbank performed well in the third quarter of the year, with excellent results in two core business areas, Private and Business Customers and Mittelstand (small to medium enterprises). Operating profit was 7 per cent higher than the same period last year, with consolidated surplus up 56 per cent on 2006.

In the year to date, Commerzbank acquired a net total of over 230,000 private and business customers, with operating return on equity reaching 18 per cent. –TradeArabia News Service