Banking: Mutual interests bind the Middle East to Asia
Developments in the Gulf’s markets are increasingly being driven by the presence of Asian – and especially Chinese – banks, so no wonder rival financial centres in the region are competing for a bigger slice of the pie.
When prominent western business leaders started withdrawing from Saudi Arabia’s flagship business conference, the Future Investment Initiative (FII), in October following the murder of Saudi journalist Jamal Khashoggi, Paddy Padmanathan was not worried.
Padmanathan, chief executive of Acwa Power, a big Saudi power producer, had numerous business meetings set up on the sidelines of ‘Davos in the desert’, as the FII is widely known, including some with the chief executives of large western banks. Their boycott of the event risked derailing those meetings, but Padmanathan was confident.
“The world is a very, very big place,” he tells Euromoney a few days after the event. “If somebody drops out, they’ll be replaced by somebody else.”
That somebody else would be, in all likelihood, from Asia. Seemingly unperturbed by the Khashoggi crisis, the contingent of Asian bankers and corporates present at the event was indeed large. In the end, Padmanathan’s schedule was just as full as he had expected.
For the head of Acwa Power, this is indicative of the wealth of options now available to businesses in the Gulf. Once reliant on local and western banks, the region now benefits from the services of a much broader pool of financial institutions.