First Gulf Bank (FGB) is looking at options to expand in Asia, as it seeks to diversify away from the congested market in the United Arab Emirates, a senior executive said.
Banks from the Gulf Arab state – and the region in general – have been looking to expand into new geographical and product areas as the high amount of cash in the local banking system drives down profitability from traditional banking services, such as lending.
Some have pursued acquisitions to achieve this aim while others have expanded by opening branches in new countries – with Asia a particular focus due to its expanding trade links with the Gulf and, in many places, the burgeoning market for Islamic finance.
FGB, the UAE’s third-largest bank by assets, is majority owned by the Abu Dhabi government. It is particularly looking to expand into North Asia and mainland China and also wants to increase its presence in India, said Simon Penney, head of the lender’s wholesale and international banking operations.
“It’s not about flag planting, but about joining up trade and finance flows both into and out of the UAE and broader Gulf,” Penney told reporters at a media event.
He added the bank’s international ambitions were in no way altered by the drop in oil prices, which has seen stock markets in the Gulf fall in recent days and led to expectations for squeezed government budgets when they are announced in the coming weeks.
FGB Chief Executive Andre Sayegh said in November last year that the bank aimed to push the percentage of its profit contributed by international operations in the near term into early double digits, from seven per cent at the time.
The bank is present in seven countries globally, including India, Singapore and South Korea, where it opened an office in July. Sayegh said in October it aimed to open a representative office in China in the next 12 months.