Singapore: Abu Dhabi-based First Gulf Bank (FGB) plans to set up four
more representative branches in southeast Asia in a push to play a
bigger role in financing energy and commodities projects in the
fast-growing region, the head of the lender's Singapore office said. (source)
FGB is in the process of applying for licences in Indonesia's capital
Jakarta, South Korea's Seoul, and Beijing and Hong Kong in China,
Mustaza Bin Qasim, chief executive officer of the bank's Singapore
branch and responsible for the Asia-Pacific region, told Zawya Dow Jones
in a recent interview.
"[At the] beginning of this year we decided... we want to stick it
out in Asia and towards that end we are setting up four representative
offices," Bin Qasim said, speaking at the lender's tenth floor office in
the heart of Singapore's financial district.
Commodities financing
FGB, which is listed on the Abu Dhabi bourse, is focusing on trade
and commodities financing in industries such as coal and oil, while
seeking a bigger presence in markets with large upside potential such as
Indonesia and China, he said.
The bank set up its Singapore representative branch in 2007 and upgraded it to a wholesale banking office two years later.
Gulf Arab states and companies in recent years have turned their
investment focus increasingly on the fast-growing and large markets in
Asia, which is a major consumer of crude oil from the region and also an
increasingly important trading partner for the six Gulf Cooperation
Council states.
"When senior management looked at growth, when they wanted to go
outside the UAE, there were several choices. They believe very strongly
in Asia's strong growth," Bin Qasim said.
FGB is applying with the countries' respective central banks for the
four licences, which could be granted this year, he said, adding that at
a later stage the lender would also look at establishing a presence in
Vietnam.
Aggressive expansion
For FGB, which is only active in Qatar and India outside its UAE home
market, the opening of the new representative offices marks an
aggressive international expansion strategy that would quadruple the
number of its staff in the Asia-Pacific region to a hundred.
Today, FGB in Asia has a loan book, including off-balance items such
as letters of credit, of about $2 billion (Dh7.34 billion) and is
already profitable, Bin Qasim said.
Other Arab Gulf banks with a presence in Singapore include Qatar
National Bank (QNB), Emirates NBD and National Bank of Kuwait (NBK).
FGB is currently also studying its options to launch a private
banking offering in Singapore, which is one of the world's most
important wealth management centres.
"We will probably embark on it but we need to be clear on the model
we want to adopt," Bin Qasim said. He added that FGB would take a
decision in two or three months.
"Certainly, we have identified that [wealth management] as a potential market and we are serious about it," he said.
Islamic banking
FGB is also considering expanding its Islamic banking business to
south Asia but that will likely follow the private banking plans, Bin
Qasim said.
The prospects for Sharia-compliant banking in countries with large
Muslim populations such as Malaysia and Indonesia are considered
enormous.
The lender's shares closed 2.83 per cent down yesterday at Dh15.45 in a flat market on the Abu Dhabi bourse.
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