By Alex Warren
Three foreign banks now have a concrete presence in Kuwait – BNP Paribas, which in late 2004 was the first to be granted a licence by the central bank; HSBC Middle East, which in October 2005 was the first to begin operations; and National Bank of Abu Dhabi, which registered late last year.
Citigroup will shortly join them after announcing in April that it had also been awarded a licence and would launch corporate and investment banking services from this month.
“It’s still early days to judge how the foreign banks are faring,” says Faisal Hasan, senior financial analyst at local brokerage and asset management firm Global Investment House. “But they were already implanted in the region and were actually dealing with Kuwaiti clients, whether corporate or high-net-worth individuals. Now they simply have a physical presence here.”
There is good reason why. Kuwait has mirrored other diminutive Gulf states in making concerted and expensive efforts to diversify away from revenues derived from oil, of which it holds about a 10th of world reserves. Analysts from the state’s largest bank, National Bank of Kuwait, predict a budget surplus of more than KD7 billion ($23.9