Oil boom driving growth in private banking

By Laura MacInnis

GENEVA (Reuters) - A wave of petrodollars in the Middle East and Russia has swelled the coffers of many private banks, and attracted the interest of others looking to grab a share of the oil cash market.

Private banking executives at the Reuters' Wealth Management Summit said the drastic run-up in crude oil and energy prices has made many of their very affluent customers even wealthier.

"Many of our clients have become very rich because of that," Citigroup's (C.N: Quote, Profile, Research, Stock Buzz) chief executive for global wealth management, Marianne Hay, said on Wednesday. "Many of them are looking for new areas to invest those petrodollars."

The price of a barrel of oil has tripled since 2002 in a surge many have likened to the 1970s oil boom. While much of the newfound wealth in the Middle East was invested in local stock markets and in property, large amounts also flowed offshore.

International statistics show that billions of dollars have flowed out of oil producing regions like the Middle East and Russia, supporting bankers' observations that the oil boom is helping to drive growth in the luxury financial services sector.

Bernard Coucke, head of Europe at ING Private Banking (ING.AS: Quote, Profile, Research, Stock Buzz), said the Dutch bank was looking to expand its presence in the Middle East in order to draw more funds, which are booked in its centers in Singapore and Switzerland.

"There is a lot of money there," he said, describing Dubai as an important pivot point between Europe and Asia.

OIL EXPORTS  Continued...