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Middle East overall & Abu Dhabi: First Abu Dhabi Bank
When investors and companies mull the benefits of doing business in Asia, or of boosting their operations in a region that still drives the global economy, their default instinct might be to turn to the West’s big lenders. We know their names. An elite handful of financial institutions, boasting decades and sometimes centuries of experience in the biggest markets. They are fully tuned into Asia, and usually well represented across the Middle East.
But they are not the only story in town. In recent years, well-managed and ambitious Middle East banks have been boosting their presence and visibility in Asia. Each is different. Some are keen to plant their flag in every big market, while others are happy opening an office in a key city or two. Smaller lenders in frontier states might be content to offer basic services via correspondent banks.
A few institutions really stand out though. These are lenders with scale and experience across the big Middle Eastern markets, including Saudi Arabia, the UAE and Qatar.
They will typically have branches in Asia’s international centres, from where they serve Middle Eastern clients keen to expand in the region – as well as Asian companies and investors making the opposite journey.
These select few banks are not just big, but also deliberate in their ambition and thinking. They plan carefully and according to their needs, and can see that the future of growth and wealth lies not just in Asia but also in those big nations of the Middle East that are rich in both energy and human capital. To succeed in one region is good, but to prosper in both, creating synergies that drive revenue and income, is great.
This is what First Abu Dhabi Bank (FAB) has done. The merger of First Gulf Bank and National Bank of Abu Dhabi created a lender of size and scale, combining the former’s market-leading consumer banking franchise and the latter’s strength in wholesale banking and capital markets. But it also created an institution with a powerful pan-Asian presence. Over the last decade, FAB has opened branches in Singapore (which serves as its regional hub), mainland China, Hong Kong, Malaysia, India and South Korea, employing 170 people.
It adapts to the needs of each market. In Seoul, it focuses on corporate and trade finance; in Shanghai, it helps facilitate trade flows between China and the Middle East and North Africa (Mena), which are rising fast, thanks to Beijing’s trade-based Belt & Road Initiative.
FAB’s offices in Singapore and Hong Kong – it is the only Middle East bank to have fully operational branches in both – specialize in global markets and structured and syndicated lending, while Singapore also offers Islamic finance. Then there’s India, the closest big Asian market, and the first port of call for many Middle East companies looking to invest in the region.
Zhou, FAB Asia
FAB is adept at working with key names in both regions to realize their banking and capital needs. It was a joint bookrunner on Indonesia’s $3 billion March 2017 dual-tranche sukuk – bringing senior delegates from Indonesia’s finance ministry to roadshows in Dubai – and joint bookrunner on a $1.3 billion senior unsecured print from Tata Steel, completed in January 2018.
It has also become, within a few short years, a vital source of liquidity and complex banking services for blue-chip firms including Toshiba, PetroChina, Samsung and India’s Jet Airways.
A cogent example here is Sinopec, a client of FAB’s since 2011. It provided the Chinese energy giant with $2.4 billion of trade facilities in 2017, helping to meet its capital needs in Asia and the Middle East.
“Rising trade between Asia and the Middle East presents a significant amount of opportunity for us,” says Singam-Zhou. “We want to be in the middle of the capital and trade flows that are moving along those two pathways.”
Rising deal flow in both regions is reflected in the data. FAB was the leading loan bookrunner and the number-one arranger of investment-grade private placements in the Mena region in 2017, according to Dealogic. But its success, again, transcends borders. It was by far the leading Middle East bookrunner of Asia ex-Japan bonds in 2017, completing 17 deals worth $2.05 billion. It was a top-20 loan bookrunner in Asia last year, and ranked eighth in India.
First Abu Dhabi Bank is strong in its core markets in the Middle East, while packing an increasingly powerful punch in Asia’s large and fast growing markets. It is there when its clients need it most, a willing provider of capital and full-service banking. And that is why it is the worthy winner of two Asiamoney awards this year: as Abu Dhabi’s best bank for Asia; and as the overall winner of the Middle East’s best bank for Asia.
Bahrain: Standard Chartered Bahrain
Standard Chartered has been in Bahrain longer than in any other market in the region, having established its first branch in the Kingdom in 1920. Its ties and connections to the business community make it the obvious first point of call to Asian companies as they expand into the region – and to local firms looking to export to Asia.
In early 2017, Standard Chartered was one of three lenders hired by Manama-based Bahrain LNG to lead a $741 million syndicated loan for the construction of a liquefied natural gas terminal that is set to be completed by February 2019.
The other two lenders involved were Korea Development Bank and Saudi Arabia-based Arab Petroleum Investments Corporation.
The transaction underlined the UK lender’s expertise in Asia and the Middle East, and the strength of its local connections. It was the first LNG regasification project to be developed as a public-private partnership, and marked the first sizeable project financing deal completed in Bahrain since 2011.
StanChart was instrumental in creating a risk framework and financing structure that can be used for similar transactions in future. It was the kind of deal we are increasingly used to seeing in the Middle East: one that brings together regional energy assets, Asian multinationals and world-class financial service providers.
The bank’s country chief executive is Boutros Klink.
Dubai: Emirates NBD
Last year was a busy one in Asia for Emirates NBD. The Dubai-based full-service bank, which has branches in Singapore, China and India, and across the Middle East, was co-arranger on a November 2017, $740 million credit facility for Mercuria Energy, with the capital set aside by the Swiss energy and commodities group for use across its Asian operations. The oversubscribed deal included investor meetings in Dubai, Shanghai, Singapore and Abu Dhabi.
Emirates NBD was also busy in the debt capital markets last year, helping Adani Ports, a leading Indian conglomerate, to issue $500 million-worth of five-year US dollar-denominated bonds and enabling two of Indonesia’s top manufacturers, garment maker Pan Brothers and tanker owner-operator Soechi Lines, each to raise $200 million using bond sales. It was also joint bookrunner and lead arranger on a two-part, $730 million revolving credit facility for Singapore-based Puma Energy.
But it is the bank’s comprehensive and long-standing commitment to Asia – where it helped to complete $3.6 billion-worth of capital markets deals in 2017 – that really makes it stand out.
Emirates NBD has notably strong corporate connections in south Asia, where it has $2 billion in total loan exposure to Middle East firms doing business in India, and Indian corporates that invest in the Middle East, including Larsen & Toubro, Aditya Birla and Vedanta Resources.
Emirates NBD is a solid financial partner in Asia, doing the heavy lifting as well as high-end deals – and doing them well.
It processed 150,000 payment transactions in the Asia-Pacific region in 2017, according to bank data, completed four derivatives transactions worth $1.56 billion for a Singapore client, and provides 11% of all the letters of credit and guarantees for UAE firms working in Asia.
Egypt: HSBC Bank Egypt
Egypt has been looking east in recent years in search of new trade partners, and one country in particular has caught its eye. China is an ideal investment ally. It needs energy, and Cairo’s ambitions include becoming a regional energy hub by shipping liquefied natural gas south and east through the Suez Canal.
In turn, Egypt is a key link in China’s ambitious Belt & Road Initiative, and the Suez Canal Economic Zone, taking shape in the Gulf of Suez, includes investment from hundreds of mainland firms.
Few lenders are better placed to benefit from this burgeoning bilateral relationship than HSBC. The British lender has been in Egypt since 1982 and in China since 1865, and is finding ever more ingenious ways to help finance and promote two-way trade between the two countries.
When China Electric Power, part of State Grid Corporation of China, needed financial backing to win its first contact in Egypt, it turned to HSBC for financing and advice. The bank underwrote two guarantees: an advance payment bond of $98.8 million and a performance bond worth $66 million.
HSBC is working with dozens of Chinese companies, from infrastructure giants to pharmaceutical firms to desalination experts, all keen to invest in the new development zone and to use it as a springboard to serve markets across the Middle East and south Asia.
Jordan: Arab Bank
Jordan’s economy has held up remarkably well, given the civil war that continues to rage just over its northern border. Amman-based Arab Bank continues to impress, reporting an increase in revenues, operating profit and loans in the full year 2017.
There are larger and better-resourced lenders in the region to be sure, but few can claim to be as adept at maximizing their resources. Arab Bank, led by chief executive Nemeh Sabbagh, clearly sees Asia as a key long-term growth market.
It has offices in South Korea, China and Singapore, with more openings planned in the years ahead. Its presence in east Asia and southeast Asia has “allowed it consistently to be in contact with and close to Asian multinationals”, the bank says, and to provide them with much-needed banking services in Jordan and across the Middle East.
“With its unique network and a team of professionals around the globe, Arab Bank is uniquely positioned to bridge Asia Pacific with Middle East and North African markets,” the bank says.
Jordan has been working hard to build a 21st century economy, with plans to build highways, dams, renewable energy hubs, and water treatment and desalination plants.
Asia’s leading infrastructure specialists and heavy manufacturing experts are well placed to offer those services, and Arab Bank is in a perfect position to provide working capital and to meet their day-to-day financial and transactional needs.
Kuwait: Kuwait Finance House
Kuwait Finance House has many positive attributes that should hold it in good stead for the years to come. It is one of the safest banks in the Middle East, as well as being one of the world’s largest Islamic finance houses, with more than 480 branches.
It is also expanding its presence overseas, most notably in Asia, where it has had a licence to operate in Malaysia since 2005. That business has flourished; today, KFH Malaysia operates 14 branches across the southeast Asian country, offering a host of classic Islamic banking services and catering to the needs of its growing number of retail customers.
It has also been involved in a number of key investment deals over the last decade, most notably the Pavilion shopping mall in Kuala Lumpur.
KFH Malaysia offers a host of innovative Shariah-compliant financial solutions to its customers, from asset and fund management to corporate banking and treasury services, helping to boost two-way investment and trade between Malaysia, the Middle East, and the wider Asia Pacific.
With demand for Islamic banking and financial services growing across Asia, including in Sri Lanka and China, Kuwait Finance House is well placed to expand its business operations in the region.
Palestine: Bank of Palestine
The speed with which trade between Asia and the Middle East is growing is embodied and exemplified by Bank of Palestine.
Based in Ramallah in the West Bank, the lender has been quietly extending its reach across Asia in recent years. Its chair is Hashim Shawa.
It has yet to open its first branch in the region, but it boasts a growing network of correspondent banks that are vital to the needs of its corporate clients and retail customers. This network, which includes lenders in China, Hong Kong, Japan, Korea, Singapore, Malaysia, India and Thailand, is testament to years of hard work and contact building.
A total of $11.7 million in credits was issued to corporate clients in those countries through the correspondent banks in the first three quarters of 2017. Its services are designed to cater to the classic import-export firm, and include spot trading and forward trading, helping Asia-based clients to transfer between their accounts in foreign currencies and to limit any losses arising from currency volatility.
QNB is determined to put itself at the heart of the growing two-way trade flows between the Middle East and Asia. And it is succeeding, thanks to its expanding network of branches in China, India, Indonesia, Vietnam and Singapore.
Over the last year, the Doha-based bank has been busy offering a host of flexible services to clients across both regions. When Ithaafushi Investments was looking for $134 million to fund a new hotel and resort in the Maldives, QNB’s Singapore branch stepped up. And when AsiaCell and Zain, telecoms operators based respectively in Iraq and Kuwait, needed capital to do business with China’s Huawei, they turned to QNB.
The lender, which established its first branch in Singapore in 2008, now offers a host of banking services from its offices in the southeast Asian city-state to Middle East clients looking to do business in Asia, from trade and project finance to cash management and payroll.
QNB clearly sees Asia as a key part of its long-term growth strategy. When some Middle East states cut ties with Qatar in June 2017, bank chief executive Ali Ahmed Al-Kuwari reacted positively by promising to “push more into southeast Asia”, where QNB aims to be a leading lender by 2020.
The CEO also outlined plans to open new offices in Hong Kong and India, and to convert its representative office in Shanghai into a fully operational branch.
The Middle East’s biggest bank by assets also aims to cut the amount of income it generates from its domestic market to 50% by 2020, from 63% at the end of June 2017, with much of the new business coming from – and in – Asia.
Saudi Arabia: SABB
Trade between Saudi Arabia and Asia is growing fast, benefiting companies and lenders alike. This relationship has for years been a unidirectional process, driven by rising demand for oil in energy-poor countries such as Japan, South Korea and China.
But as the Kingdom opens up to the world, putting its vast wealth to work by building new cities and listing state assets on local and foreign bourses, the relationship looks set to flourish, while becoming more equal and balanced.
A few lenders aim to profit from this process, and none more so than SABB. The Riyadh-based lender is a leader in its field, being the first Saudi financial institution to open a dedicated China desk in 2010, a decision that “made SABB the first point of contact” for mainland corporates entering the Kingdom, the bank says.
“This is the first such initiative by a Saudi bank to encourage bilateral trade,” the bank adds.
A dedicated Korean desk followed four years later, geared toward serving the local needs of Korea’s heavy manufacturers and consumer brands. SABB was also the first Saudi bank to roll out renminbi-denominated international settlement services, and to meet clients’ renminbi transaction banking and cash management needs.
In recent years, the bank has led a number of roadshows to demonstrate its capabilities and to educate clients about the growth and long-term benefits of using the Chinese currency as a tender in international trade.
SABB’s network and connections across Asia will only grow, and it is a worthy winner of this award.