Europe's largest banks, including UBS Group AG, are investigating the possibility of offering clients leveraged deposits through Saudi Arabian lenders. This strategy aims to exploit the higher savings rates offered by banks in the kingdom, according to sources familiar with the matter. UBS has reportedly presented this concept to its wealth management clients, suggesting they use borrowed funds to enhance returns from money placed with Saudi banks.
One specific target for these leveraged deposits is Al Rajhi Bank, Saudi Arabia's largest lender by market value. Al Rajhi Bank has recently advertised savings rates in the vicinity of 5.1%, making it an attractive option for this type of investment.
This move by UBS aligns with its broader strategy to bolster its presence and operations in the Middle East. The bank recently relocated Christl Novakovic, its head of Europe, Middle East, and Africa wealth business, to the Gulf region. Niels Zilkens, the regional head of wealth management, is also moving to Doha as part of this regional focus. These leadership changes follow a series of senior banker departures and are intended to capitalize on significant long-term growth opportunities in the Middle East.
