Two of the largest banks in the United Arab Emirates will set up offices in China to boost trade between both nations.
Emirates NBD, the largest banking group in the UAE and the Middle East, will open an office in Beijing while National Bank of Abu Dhabi (NBAD) set up shop in Shanghai this week.
Emirates NBD will become the first Middle East bank to operate in Beijing. Earlier this year, Emirates NBD pioneered the sale of yuan-denominated bonds or dim-sum bonds in the Middle East.
"Our imminent presence reflects our confidence in the China growth story and we expect a significant business enhancement as a result of this office," said Kevin Flannery, general manager of international business at Emirates NBD.
"After some time, we will be reviewing our presence and may seek to invest further into China."
The NBAD office in Shanghai complements its existing operations in Hong Kong. A bank spokesman said this shows that NBAD sees itself as the conduit of business between Asia and the rest of the world.
NBAD is the leading bank in Abu Dhabi and is ranked the safest bank in the Middle East and one of the world’s 50 safest banks.
The entry of UAE banks into China follows the China Banking Regulatory Commission’s easing of restrictions on investments in lenders. This allows qualified companies to buy shares through private placements, share subscriptions or mergers and acquisitions.
There are over 200 foreign branches and subsidiaries operating in China. Despite this, foreign banks are a small presence with assets less than 2% of China’s total banking industry assets.
Analysts, however, see the Chinese system as evolving from one of state ownership to more private ownership, opening up the possibility of more complex ownership structures for banks.
Union National Bank, which is based in Abu Dhabi, was first UAE bank to do business in the mainland. It opened a representative office in Shanghai in 2007.
Do you know more about this story? Contact us anonymously through this link.