First Abu Dhabi Bank, the No. 1 lender by assets in the United Arab Emirates, plans to roughly double its office space in Hong Kong, said two sources familiar with the matter.
Mashreq Bank, the UAE’s fifth-largest, will relocate staff to a new office in Central in the third quarter, it said in a statement in response to a query.
The growing presence of the Middle Eastern financial institutions in Hong Kong comes against the backdrop of the US-Israeli war on Iran that has put Gulf countries centre stage by disrupting their oil supplies.
Financial industry sources said the Middle Eastern banks’ moves were tied to their efforts to internationalise and strengthen links with China, as cross-border trade and investment between the two regions remain strong.
“Our growth in Hong Kong is firmly anchored in our ability to provide banking solutions facilitating the increasing trade and investment flows between Greater China and MENA,” said Chermaine Lai, country head at Mashreq Bank Hong Kong.
Oman’s Sohar International Bank announced in April it has received approval from the Hong Kong Monetary Authority to establish a representative office, marking its foray into an international market for the first time.
First Abu Dhabi Bank and Sohar International did not respond to requests for comment.
The sources spoke on the condition of anonymity as they were not authorised to speak to the media.
Mashreq, whose new office is double the size of its current premises, said the bank sees Hong Kong as a “significant offshore hub for China-related financing activity”.
Sohar International expects to kick off its business in the city in the second half, according to a person with direct knowledge of the matter.
The three Gulf banks will operate from Cheung Kong Centre II, an office tower in Central, the sources said.
Sam Gourlay, property consultancy JLL’s head of office leasing advisory in Hong Kong, said the recent Middle East conflict may have, in some cases, prompted banks to fast-track their strategic investment plans in the city.
Hong Kong serves as a gateway for moving capital from and into the mainland, and most global banks have their regional hubs in the city, which offers a host of services – from corporate banking to wealth management.
The HKMA has been actively promoting Hong Kong’s financial system and market advantages to the Middle Eastern countries over the past few years, including via bilateral meetings with central banks in the Middle East, a spokesperson said.
Gulf lenders have been expanding outside of their home turfs in the Middle East and beyond in recent years as they look to tap new markets and boost trade and investment by opening commercial branches or through mergers.
The banking services offered by First Abu Dhabi Bank, Mashreq Bank and Sohar International include corporate and investment banking, trade finance, transaction banking, treasury services and wealth management.
First Abu Dhabi Bank has offices in locations including Hong Kong, Shanghai and Singapore, and last year it joined China’s Cross-Border Interbank Payment System as a direct participant amid strengthening ties between the UAE and China.
Mashreq has also been growing in Asia, particularly in India and in Pakistan, where its digital bank Mashreq NEO became fully operational late last year, while Sohar maintains a more limited international footprint.
Five Middle Eastern lenders currently have a banking presence in Hong Kong, out of about 200 banks registered with HKMA, according to data from the city’s de facto central bank.
Sohar International said in a LinkedIn post last month that opening a Hong Kong office reflects the bank’s “endeavours to internationalise its business” and will support its clients who do business in the wider Asian market. (Reuters)
