x Abu Dhabi, UAESaturday 20 January 2018

NBAD opens trade route East

Aiming to smooth the way for trade between the Gulf and East Asia, the bank is building name recognition through Hong Kong branch.

Two months after opening its first Asian branch in Hong Kong, National Bank of Abu Dhabi (NBAD) has signed its first deal there and is building its name in the market, the bank's regional manager says. The NBAD Hong Kong branch, taking up a floor in what has been described as one of the city's most desirable office buildings, aims to smooth the way for trade and investments between the Gulf and East Asia.

The bank signed a deal late last month with a Hong Kong-based blue chip company to help it bid for projects in Abu Dhabi. And while the bank's name is not widely known in East Asia outside of the banking sector, the recent financial turmoil in Dubai has helped NBAD's quest for recognition. "The Dubai World incident helped us in a positive way," said Ernest Law, the regional manager of NBAD and a Hong Kong native with 25 years of banking experience.

"Everybody is looking at that area with great interest now and they are starting to distinguish between the credit differential between Dubai and Abu Dhabi." NBAD's move into Asia is a response to rapidly growing trade flows between China and the Gulf. It will make it easier for companies investing in either direction to carry out transactions, said Ben Simpfendorfer, the chief China economist at the Royal Bank of Scotland in Hong Kong.

"It's a reflection of the growing commercial clout of the relationship between China and the Gulf," Mr Simpfendorfer said. The bank has been contacted by several companies, mainly specialising in infrastructure, that hope to win contracts in the Gulf. And a few smaller firms have been in touch to ask about finding local partners in the region. NBAD has ambitions to open similar branches in mainland China, Malaysia, Singapore, Indonesia and Vietnam within five years, with the Chinese and Malaysian branches to be open by the end of this year, Mr Law said.

Before then, he is concentrating on building a team of about 30 local people from its current level of about 15, and ensuring the branch can fund itself through earnings. NBAD's policy is to hire local staff wherever it operates. Their expertise will be vital when NBAD expands into China, a huge market coveted by foreign investors but also viewed with some trepidation. Mr Law has five years' experience working for banks in Beijing and Shanghai, including Banco Itau of Brazil, and recalls some of the pitfalls that Brazilian investors looking to set up factories or find local partners fell into.

"There's a huge difference between Asian firms investing into China vis-a-vis other foreign firms. The cultural difference is key," he said. "Foreign investors have certain concerns about the legal situation and protocols in China. "You see all kinds of troubles - they can't find the right people, they appoint foreign managers to run manufacturing plants who then come into conflict with local representatives.

"But these are the challenges one faces in an emerging market." @Email:business@thenational.ae