KUWAIT, 11 January 2005 — Kuwait’s central bank has given initial approval to the National Bank of Abu Dhabi to open a branch, paving the way for a second foreign firm to enter its banking sector, the central bank’s chief said yesterday.
“This approval is the second such case in which a foreign bank is allowed to open a branch in the state of Kuwait,” Central Bank of Kuwait Governor Sheikh Salem Abdulaziz Al-Sabah told state news agency KUNA.
The license still requires the approval of Kuwait’s council of ministers to go into effect, Sheikh Salem said. In January 2004, Parliament passed a bill allowing licenses for foreign banks as part of the oil-rich Gulf country’s bid to attract investment and know-how.
France’s BNP Paribas won a license in August 2004 to open a Kuwait branch, and the Gulf state will soon allow more international players to enter its banking sector, Finance Minister Mahmoud Al-Nuri said on Saturday. US-based Citigroup and British-based HSBC and Standard Chartered are among other banks believed to have applied to operate in Kuwait. “It’s expected the current year will witness licensing for opening branches of other foreign banks in the local market, given that the central bank has recently received several requests from international and Gulf banks guaranteeing their interest in opening a branch in Kuwait,” said Sheikh Salem.
“The central bank will embark on filing these requests and studying them within the context of a group of criteria and regulations that were agreed by the central bank’s board of directors,” added Sheikh Salem. The central bank chief said approvals at the present time would be limited to only a few foreign banks.
The law passed by parliament last year stipulates that half of a bank’s work force should be Kuwaitis, as is also required of the country’s seven local commercial banks.
Kuwait, which sits upon 10 percent of world petroleum reserves, was one of the Gulf’s bright spots before investors left in the wake of the 1980-1988 Iran-Iraq war and Iraq’s 1990 invasion of Kuwait.
