Dubai: The Gulf banks are fast replacing European lenders in expansion within the Middle East region and into some of the fast growing emerging markets in Asian and Africa in the context of improving health of their balance sheets and strong support from shareholders.

Banks from GCC, particularly those from the UAE and Qatar are in the forefront of overseas expansion. GCC-based banks in general are also establishing small branches and representative offices across Asia to capitalise on the increasing trade flow between the GCC and the Asia–Pacific region.

First Gulf Bank (FGB) announced last month that it has a new representative office in South Korea as part of plans to expand its presence in Asia Pacific. In addition the bank has plans for expansion in China and Indonesia.

National Bank of Abu Dhabi plans to set up a regional financial base in India before the end of this year as part of its overseas expansion strategy. NBAD is the first UAE bank to be granted a banking licence in India since 1980. The bank already has a presence in 17 countries from China to the UK. Other leading UAE banks such as Abu Dhabi Commercial Bank and Dubai’s Mashreq already have operations in India.

In June this year Dubai Islamic Bank (DIB) completed the acquisition of 24.9 per cent shares in Bank Panin Syariah, an Islamic bank from Indonesia. The bank is in the process of acquiring a total of 40 per cent stake in in Bank Panin Syariah.

Strategic stake

In addition to its acquisition in Indonesia, DIB is up a new bank in Kenya. Outside the UAE, DIB already has operations in countries such as Pakistan, Sudan, Jordan and Bosnia. In Pakistan, Dubai Islamic Bank Pakistan was established in 2006 and DIB fully owns it. In Sudan, the bank has a strategic stake of 28.4 per cent in Bank of Khartoum and in Jordan; DIB is present through Jordan Dubai Islamic Bank in which it owns 20.8 per cent shares. DIB holds 27.3 per cent stake in Bosna Bank International in Bosnia which was established in 2000 as the first bank in Europe to operate on the principles of Islamic banking.

Abu Dhabi Islamic Bank (ADIB) has operations in countries such as Iraq, UK, Egypt and Qatar. Emirates NBD that completed the acquisition of BNP Paribas’ Egyptian assets last year has always maintained that it is open to overseas acquisitions or expansion where opportunities are good.

Qatari banks have been seeking overseas expansion to cut dependence on local markets and access trade flows across the Middle East, Africa and Asia. During the last two years Qatari banks have been regional leaders in overseas acquisitions. Qatar National Bank has a presence in more than two dozen countries. With the acquisition of NSGB in Egypt and the opening of the offices in India and China, QNB’s international assets rose sharply last year.

Doha Bank, which has already opened representative offices and branches in Kuwait, Dubai, Abu Dhabi, Japan, China, Singapore, South Korea, Australia, Turkey, the UK and Canada, is expanding its presence in Hong Kong, India and Saudi Arabia.