Over the past year banks in the United Arab Emirates have lost over US$ 15 billion in government deposits. That number becomes notable when one discovers that the country’s largest bank, the National Bank of Abu Dhabi (NBAD), accounts for US$ 13 billion of that amount. Other major financial institutions throughout the Gulf region are suffering a similar fate, and continue to adjust to the ‘new normal’ of weak oil prices.
Yet in spite of tough times at home, many Arabian banks are pressing ahead with ambitious global expansion plans that have been gathering steam for a few years now. In 2013, Saudi Arabia’s National Commercial Bank (NCB) became the first amongst regional banks to set up a representative office in China; many followed. NBAD is now halfway through a five-year plan to expand globally into more than 20 “mega-cities”. The bank sees long-term growth opportunities in what it calls the West-East corridor, stretching from Nigeria to China.
Now the attention appears to be shifting to India. In May 2015 Qatar-based Doha Bank launched its first branch in Mumbai as part of a broader plan to expand into 14 new countries. In early October NBAD bought Royal Bank of Scotland’s offshore loan book in India, and will launch operations in Mumbai in early November. As many Western banks flee emerging and frontier markets for the (perceived) safety of home, the future of banking in emerging markets seems to be ripe for these upstarts to establish dominance.
Photo Credit: Khaleej Times