Bahrain: Private wealth rising 4.5% to hit $200bn

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Overall growth of private wealth in Bahrain is expected to increase steadily to 4.5 per cent compound annual growth rate (CAGR) and reach $200 billion over the next five years, a new report said.

Equities, at 6.7 per cent CAGR, and cash and deposits, at 3 per cent CAGR, will be the primary contributors to this growth rate over the coming five year period, added the study titled “Global Wealth 2017: Transforming the Client Experience” by The Boston Consulting Group (BCG), a global management consultancy.

While private wealth growth in Bahrain witnessed slight growth in 2016 (3.9 per cent), the amount of wealth held in equities increased to 5.8 per cent, in comparison to cash and deposits at 3 per cent and bonds at 1.6 per cent, the report said.

The 17th annual study by BCG outlines the evolution of private wealth from both global and regional perspectives, addresses key industry trends, and places special emphasis on how players can create fresh and innovative client journeys by leveraging digital technology to its fullest in wealth management business and operating models.

Over the next five years, wealth in the Middle East and Africa region is set to reach $12 trillion—and the UAE, Oman, Qatar, and Saudi Arabia’s contribution will account for 21.1 per cent.

UHNW growth

Taking an in-depth look at wealth distribution, private wealth held by ultra-high-net-worth (UHNW) households (those with above $100 million) in Bahrain experienced robust growth—at 7.6 per cent— in 2016. The growth experienced by this segment is expected to continue at a steady pace; 9.8 per cent CAGR through 2021.

The upper high-net-worth (HNW) segment (those with between $20 million and $100 million) experienced very slight growth in 2016 at 0.6 per cent. In the next five years, the projected growth of this segment will see a decrease to -1.1 per cent CAGR.

In Bahrain, private wealth held by the lower HNW segment (those with between $1 million and $20 million) witnessed burgeoning growth of 6.1 per cent in 2016. Private wealth in this segment has a projected CAGR of 7 per cent over the next five years.

The total number of millionaire households (those with more than $1 million in net investable assets) in Bahrain increased by 1 per cent CAGR in 2016. Looking ahead, growth is set to decline slightly at 0.4 per cent CAGR by 2021.

The findings of BCG’s report also revealed that, in 2016, Switzerland remained the largest destination for the Middle East and Africa’s offshore wealth, accounting for 31 per cent with a projected CAGR of 4.7 per cent over the next five years. This was followed by the UK/Channel Islands at 23 per cent with a CAGR of 5 per cent, and Dubai at 18 per cent with a CAGR of 4.5 per cent.

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