ADCB Representative Offices – A Rationale for Remote Capability
by David Manson, Country Head UK, Abu Dhabi Commercial Bank
The United Arab Emirates (UAE) is the UK’s largest civil export market in the Middle East and the 12th biggest globally (UKTI, Dec 2015). Bilateral trade is now heading for GBP15bn per annum with an annual GDP growth rate averaging 4.76% since 2000. There are presently some highly visible opportunities in transport, infrastructure and engineering (and their respective supply chains) as the UAE continues to develop regional and global communication hubs, whilst opportunities exist to a raft of British and European exporters in many industries, including a rich seam of service and professional industries as the UAE develops a dynamic tertiary sector.
Abu Dhabi Commercial Bank (ADCB) has typified this growth story in building out and developing the UAE economy in partnership with a broad range of clients, and has been increasingly focused on the new opportunities afforded to international investors into the Emirates. This growth has manifested itself initially in increasing volumes of international transactions for its UAE clients, but increasingly to more physical investment in joint ventures and subsidiaries being established onshore which we have facilitated. This opportunity has become all the more significant as it coincides with many regional and international banks reducing capability in the Middle East region, redeploying capital in core businesses (or to meet regulation) and opting instead to support their clients through institutional partnerships. ADCB has made the strategic decision to extend our relationships with these clients (often via their primary banks) and to support them more directly.
ADCB recognised the trend towards international banks reducing capacity in the region some years ago, and moved to establish a series of strong banking partnerships and alliances to deliver full service UAE banking to many of the world’s major banks, and specifically to their clients. The establishment of representative offices in London and Singapore further supports this approach. ADCB seeks to provide a brand presence to these significant investor markets, and to complement and support these clients – and their banks - without duplicating or competing with ‘home market’ providers. In turn, these major banks can increasingly depend on ADCB’s own home market strengths, delivered in partnership and offering a full suite of products and services which would be expensive and inefficient for overseas providers to seek to replicate. In short, we aim to create a connected, ‘best of both worlds’ proposition which best meets the needs of our mutual international client.
Modus operandi and differentiation
ADCB’s representative offices are extensions of the group wholesale banking division, and serve as market ‘anchors’ to develop trade and inward investment from corporate and institutional names. These offices engage directly in business development in both London and Singapore, and indeed their respective regional hinterlands as strong regional hubs for many international names. The representative offices typically engage their respective markets with a three-pronged focus:
- To promote and provide home market institutions with cash and clearing services for their client business in the UAE;
- To connect corporate and institutional clients to ADCB’s risk management capabilities in trade (e.g., to manage risk to the bank, country and buyer in export transactions);
- To support corporates investing and transacting in the UAE with a full range of transactional banking and account services.
In recent years, ADCB has won significant volumes of new accounts from its primary banking partners which have been handled by dedicated specialist teams exclusively assigned to executing client instructions. Increasingly we are looking to extend this capability to a more collaborative approach with these banking partners, adding more value earlier in the client journey. For example, over the last two years, ADCB has hosted a series of inbound trade missions working with Santander’s clients and prospects to explore opportunities and to introduce them to UAE importers, distributors and potential buyers.
Each mission typically comprises 10-12 prospect clients in the UAE each year and creates a model for supporting many more prospect clients remotely or indeed ‘virtually’. For example, our Chief Economist has presented directly to the offices of prospective UK clients via weblink. This has often covered much of the initial ‘fact finding’ we might typically offer during early phases of a trade mission and thus allows our visiting delegates to spend time more productively with ADCB clients much earlier in the programme. This approach is scalable and low cost, and has been very well received by prospective clients evaluating the UAE and the wider region as a potential new market.
We have also established and resourced a dedicated multinational corporation (MNC) unit in the coverage team with a cosmopolitan international team of market specialists. This unit offers dedicated expertise in selected markets where we see significant scale of inward investment, e.g., China, S Korea, India and the UK. Country specialists engage directly with prospective clients, with their ‘house’ bankers in their home country, and with the ADCB representative offices where appropriate, to map out the opportunities and support client planning for growth and investment.