Major Dubai, Singapore banks expanding into new markets
The Dubai Islamic Bank has revealed plans to expand in East Africa, once it settles into its new base in Kenya, where it obtained regulatory permission to operate in May, as Singapore’s UOB has just become the first Singapore bank to be granted a licence to operate as a foreign owned subsidiary bank in Vietnam.
News of the two banks’ expansion plans emerged over the last few days, and comes as the global banking sector continues to undergo major shifts.
The Dubai Islamic Bank’s plans for East Africa were revealed last week in comments by the Dubai-based bank’s chairman, Mohammed Ibrahim Al Shaibani, who was quoted as saying that DIB would look to solidify its foundations in the East African Islamic banking sector once it was up and running in Kenya.
The bank had been granted permission to enter the market in May by the Central Bank of Kenya, which according to published reports, had used the new entry to highlight Kenya’s growing status as a “premier regional financial services hub”.
DIB will be Kenya’s third full-fledged Islamic institution, joining the Gulf African Bank and First Community Bank, although there is takaful Islamic insurance firm, a Shari’ah-compliant mutual fund and two cooperatives, and five conventional lenders offer Shari’ah-compliant services in the county, a report on the IBSIntelligence.com website noted.
‘First foreign-owned subsidiary
bank licence in Vietnam’
Around the same time DIB was making its announcement about its plans for Kenya but a few thousand miles to the east, meanwhile, Singapore-based United Overseas Bank Ltd unveiled its plans to expand into Vietnam, as part of its strategy of looking to “broaden and to deepen its support for businesses and consumers in Vietnam, as well as its regional clients investing in the country”.
The so-called foreign-owned subsidiary bank (FOSB) licence in Vietnam will, UOB said, enable it to extend its branch network beyond Ho Chi Minh City, as well as to be able to offer its financial products and services to businesses and consumers located in other cities in the region.
It said it would “also consider opening a branch in Hanoi, which is Vietnam’s gateway to fast-developing cities in the north, such as Hai Phong, Quang Ninh and Hai Duong”.
In a statement announcing the new in-principle licence, UOB noted that Vietnam was “an attractive investment destination for many businesses”, and that foreign direct investment inflows to the country rose to a record US$12.6bn in 2016, up 6.8% from the previous year. .
In the same statement, UOB deputy chairman and chief executive Wee Ee Cheong said that being granted the in-principle licence marked the start of a new chapter for UOB in Vietnam, where the bank has had a “longstanding presence” for some time.
“With the in-principle FOSB licence, we look forward to helping our clients realise the business potential in Vietnam, which is one of the fastest developing countries in Asia,” he added.