National Bank of Abu Dhabi’s new chief executive has outlined his vision for expanding the bank’s focus across a fast-emerging “West-East corridor.”
Alex Thursby said the bank’s wholesale network would focus on eight banking centres within the economic bloc, which stretches from Lagos in the west to Tokyo in the east. It will also establish five international bank franchises within the most rapidly-growing countries, he said.
“We want to remain and develop further to be the best bank in the UAE but we also want to start to capture the opportunity that sits on the West-East corridor,” he said yesterday on the sidelines of the UAE Global Investment Forum, organised by Abu Dhabi’s Department of Economic Development and Institutional Investor.
“The West-East corridor will see the greatest emergence of the middle class in the next 20 years. By 2025, all but two of the new mega-cities of the world will come from this corridor.”
A veteran of the Asia-Pacific banking industry, Mr Thursby was appointed in July with the task of helping steer NBAD’s expansion into emerging markets. In an effort to boost profitability, he has already hinted of a change in strategy.
Yesterday, he delivered more details of this vision, outlining how the bank’s strategy would be based on three “geographic pillars.”
First, the bank aimed to establish itself as the largest, safest and best performing bank in the UAE and over time in the GCC.
Farther afield, the lender will focus its wholesale banking operations on eight banking centres within the East-West corridor. Customers would be served around five industry groups similar to Abu Dhabi’s own areas of interest. The bank’s existing North American and European branches will be integrated into the network.
Finally, NBAD will build five international bank franchises in the largest and fastest growing economies in the corridor.
The expansion will primarily be achieved through organic growth. In contrast, two of the GCC’s other largest banks, Emirates NBD and Qatar National Bank, have both used acquisitions to help propel their expansion outside their domestic markets.
“The sheer size of these countries, Indonesia, Malaysia, Egypt … mean they will be the future growth engines of the world,” he said.
Mr Thursby said the strategy would tap into Abu Dhabi’s advantageous geographic position in the centre of the corridor.
He cited Abu Dhabi’s stability as a factor for Asian investors looking to invest in the emirate.
Asian banks would be able to use Abu Dhabi as a “staging post” for investing in Africa.
Trade and investment are already flowing fast between Africa and the Far East. China is already Africa’s biggest trading partner, with US$200 billion of goods moved between the two sides last year.
Under NBAD’s previous chief executive, Michael Tomalin, the lender has already dipped its toes into Asian markets. NBAD opened a representative office in Shanghai in June last year to complement its Hong Kong offices and established conventional banking operations in Malaysia in July of that year.
NBAD reported net profits for the second quarter of Dh1.21 billion, an increase of 15.7 per cent compared with the corresponding period a year earlier but below analysts’ estimates as pronounced market volatility hit its income from investments.