If you’re looking for bad news, DIFC is not the place

It was another record year for the company, including a mind-boggling 68 percent leap in net profits

February 18, 2025, 6:07 PM

DIFC Essa Kazim — DIFC governor Essa Kazim. The number of companies registered grew by 25% and there was a 10% increase in people employed there

The annual review by policymakers of the Dubai International Financial Centre is one of the great media set pieces of business life in the emirate – a chance for journalists to take the pulse of the financial industry in Dubai and pose some probing questions about this vital sector.

The trouble is, the DIFC keeps coming up with such excellent results that there is little opportunity for the media muck-rakers to latch on to anything less than positive in the presentation.

In the journalism profession, where traditionally bad news is good news – this can be just a tad frustrating.

So it was again with the review of 2024 – marking two decades of the DIFC – presented by DIFC governor Essa Kazim and his team in the Gate building.

It was another record year, with a 25 percent jump in the number of companies registered in the centre, a 10 percent increase in people employed there and a mind-boggling 68 percent leap in net profits to $340 million. Assets under management came to just short of $5 billion.

For the umpteenth year in succession, DIFC confirmed that it is indeed the leading financial hub of the region, and one of the fastest-growing financial centres in the world.

Surely there must be something to hang a sensational headline on, the hard-nosed hacks wondered? What about the hugely ambitious plans for DIFC2.0 – the strategy to triple the size of the centre over the next few years?

We haven’t heard much on that for a while, and surely the cost of building it will be rising all the time and will require DIFC to tap global capital markets, as they did 10 years ago with a $700 million sukuk to finance the last surge in expansion?

Not at all, came the assured response. Plans for DIFC2.0 are well under way, work on the enormous site over the road from Gate Village is ongoing, and details will all be revealed soon, CEO Arif Amiri assured us.

As for the cost, Kazim was perfectly confident: there would be no need for a big bond issue this time, because of the underlying financial strength of DIFC’s business model.

In Dubai’s booming real estate market, the DIFC was able to show a fair value gain of $65 million on its investment properties alone.

How about the seemingly low level of involvement by US financial institutions in DIFC? The presentation showed that 51 percent of registered firms came from the Middle East and Asia, 22 percent from the UK, 12 percent from Europe – and only 7 percent from the US, the global financial superpower.

Irrelevant, said Kazim. All the big American blue bloods have been present in DIFC from the early days, and use the centre as a hub for doing business in the rest of the region as well as the wider catchment area of South Asia and Africa.

Nor is DIFC over-worried about the growing volatility in the US under the Trump administration. The UAE could be exposed to this via the dollar peg, which could make interest rate fluctuations a concern, but it has long learned to live with that.

And in any case, it is confident in the strength of its own regulatory systems to handle any unforeseen developments from the US.

Surely the DIFC has some twinges of fear when it sees the ramped-up competition from rivals in Abu Dhabi and Riyadh competing to be the premier financial hub in the region?

Nothing to see here, Kazim suggested, noting that the number of hedge funds in DIFC had doubled over the past year even as rivals had mounted a serious campaign to woo them elsewhere. DIFC’s lead in the race was intact, and it was showing no sign of slowing down.

And that was virtually that. Anyone who had come to the review looking for some chink in the DIFC’s armour, some hint of challenges to come, went away disappointed. As has been the case for most of the last 20 years.

Frank Kane is Editor-at-Large of AGBI and an award-winning business journalist. He acts as a consultant to the Ministry of Energy of Saudi Arabia