HONG KONG: Leading Gulf banks are rapidly expanding their presence in Hong Kong as financial institutions from the Middle East seek closer access to China markets, stronger cross-border trade links and greater international diversification amid rising regional instability.

The expansion comes as the ongoing US-Iran conflict and disruptions to regional oil supplies push Gulf economies and major lenders to strengthen overseas operations and reduce reliance on domestic market conditions.

First Abu Dhabi Bank (FAB), the United Arab Emirates’ largest lender by assets, plans to nearly double its office space in Hong Kong, according to sources familiar with the development. Mashreq Bank, another major UAE lender, confirmed it will move to a significantly larger office in the city’s central business district later this year.

Oman-based Sohar International Bank has also secured approval from the Hong Kong Monetary Authority (HKMA) to establish a representative office in the city, marking its first expansion into an international market.

Banking industry officials said Hong Kong is increasingly viewed by Gulf financial institutions as a strategic gateway to mainland China and the wider Asian market. Growing trade and investment flows between China and the Middle East have accelerated demand for corporate banking, trade finance and cross-border payment services.

Mashreq Bank said Hong Kong has become an important offshore hub for China-related financing activity. Sources said FAB, Mashreq and Sohar International will all operate from Cheung Kong Center II in Hong Kong’s Central district.

Hong Kong remains one of Asia’s most important international financial centres and serves as a key access point for global capital entering and leaving China. International banks in the city provide services ranging from corporate lending and treasury operations to wealth management and trade financing.

The HKMA said it has actively promoted Hong Kong’s financial market opportunities to Middle Eastern countries through engagement with regional central banks and financial institutions over recent years.

Gulf banks have expanded aggressively outside their home markets in recent years through acquisitions, branch openings and international partnerships aimed at boosting trade-related business and diversifying revenue sources.

First Abu Dhabi Bank last year joined China’s Cross-Border Interbank Payment System (CIPS) as a direct participant, reflecting growing financial cooperation between the UAE and China. Mashreq has also increased its footprint across Asia, including in India and Pakistan, where its digital banking operations recently became fully operational.

According to HKMA data, five Middle Eastern banks currently operate in Hong Kong among nearly 200 registered banks in the city.

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