Emirati banks are seeking to take advantage of economic opportunities resulting from Western sanctions imposed on Russia, according to the Wall Street Journal. Emirates NBD, a key government-controlled financial institution in Dubai, has reportedly recruited bankers from Russian lenders in order to establish a local subsidiary focusing on managing funds from wealthy clients. Additionally, First Abu Dhabi Bank, the largest lender in the United Arab Emirates (UAE), is reportedly setting up a department dedicated to serving wealthy Russians.
Reports suggest that local banks in the UAE have already opened thousands of accounts for Russians. However, the process of verifying proof of funds and ensuring that applicants are not politically exposed can be time-consuming, often taking several weeks to complete. UAE officials have stated that local banks actively avoid providing services to sanctioned individuals in order to maintain correspondent relationships with US banks that handle dollar transactions.
The number of Russian immigrants relocating to the Gulf state has reportedly increased significantly in the past year, making the Russian-speaking community one of the most visible among the nearly nine million people residing in the UAE.
According to data from real estate agent Betterhomes, Russians have become the third-largest buyers of property in Dubai, up from ninth place in 2021, during the second quarter of 2023. In addition, inflows of foreign currency to the UAE have been rising at a rate of around 20% each month since May 2022, compared to the months prior, as reported by London-based Capital Economics.
An unnamed government official emphasized that the UAE benefits from its reputation as a stable global investment hub, stating, “The ongoing global climate has led to financial and investment inflows to the UAE. We will continue to take these responsibilities extremely seriously, especially given the current geopolitical landscape.”
It is worth noting that while most Russians who have moved to the UAE are not subject to sanctions, the country has also welcomed members of Russia’s sanctioned elite.
The increasing trade and investment ties between Russia and the UAE reflect the evolving geopolitical landscape and the UAE’s efforts to position itself as an attractive destination for international capital. The UAE’s stable economy and strategic location make it an appealing choice for wealthy individuals and businesses seeking investment opportunities outside of Russia.
The expansion of Emirati banks’ services to cater to wealthy Russians further solidifies the UAE’s position as a financial hub in the Middle East. As the UAE continues to attract foreign investment, it remains to be seen how its relationship with Russia and the impact of Western sanctions will shape its future economic prospects.
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