First Abu Dhabi makes China expansion a priority

Cop28/Stuart Wilson

• 2023 revenue in China up 50%
• China is UAE’s largest trade partner
• Renminbi trade surpasses Euro

First Abu Dhabi, the UAE’s largest bank by assets, plans to triple revenue from its operations in China by 2026.

FAB is the only fully licensed UAE-based bank in mainland China and considers growth in the country a “priority” after revenue rose by 50 percent last year to about AED100 million ($27 million). 

Group CEO Hana Al Rostamani said the bank is committed to expanding its business in China while fostering Chinese engagement in the GCC and Egypt. 

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“We look forward to facilitating more vital corridor trade and investment between the two regions,” she added.

China was the UAE’s largest trade partner in the first half of 2023, with non-oil bilateral trade exceeding $38 billion.

Both sides have previously committed to expanding total trade – including oil – to $200 billion annually by 2030. 

China is also the third-largest foreign investor in the UAE, which is home to more than 6,000 Chinese businesses.

FAB launched its first Chinese branch in Shanghai in 2022 and became the first foreign bank to obtain a Chinese currency licence. 

The bank said it is targeting $82 million in annual revenue from China within the next two years – still a tiny percentage of its total income, which reached $7.6 billion last year.

Zhang Yiming, China’s ambassador to the UAE, said: “We hope that FAB will give full play to its local full-licence advantage and strengthen cooperation with China in helping Chinese enterprises to go overseas and settle in the UAE, broaden investment channels in China, and promote the internationalisation of the renminbi [the Chinese currency].”

According to think tank Asia House, the continued internationalisation of the renminbi (RMB) as a global trade currency could further enhance China’s economic sway in the Middle East.

Its use in trade settlement has tripled in the last three years. It now accounts for about 6 percent of global trade, surpassing the Euro. 

Asia House analysts earlier said that China is making progress in persuading the Gulf states to accept payment for their oil in RMB. Last April, Abu Dhabi National Oil Company completed the Gulf’s first cross-border RMB-settled LNG trade with China. 

“The UAE’s accession into the Brazil, Russia, India, China, and South Africa (Brics) group will place them closer to Chinese decision-making and strategic thinking on global affairs,” Asia House said.

Experts have told AGBI that GCC banks may be forced to look overseas to fulfil growth ambitions as home markets become increasingly saturated.

While some banks have already ventured abroad – mainly into Turkey, Egypt and Pakistan, which constitute nearly half of their presence outside the Gulf – more developed markets such as China, the US and Europe remain untapped.

With total assets of $318 billion as of the end of 2023, FAB is among the top 50 banks globally by market capitalisation.