The Middle Eastern subsidiary of Crown Agents Bank (CAB), a British provider of cross-border payments, has received an in-principle approval from Abu Dhabi’s financial hub, the ADGM.
CAB Global Markets has received the initial approval for a Category 2 financial services permission from the Abu Global Market’s Financial Services Regulatory Authority, according to a statement from the lender on Tuesday.
The bank offers foreign exchange, cross-border payments, trade finance and treasury management solutions with a focus on emerging markets. It only deals with banks, central banks and non-bank financial institutions and does not have corporate or retail customers.
“We don’t deal with corporates directly unless they are linked to the sovereign,” Neeraj Kapur, chief executive of CAB, told The National.
“Our job is to help them trade, deal with cross-border financial transactions and FX, and be able to take deposits as a UK-regulated bank.”
The licence will accelerate access to the government and the UAE Central Bank, the company said.
“We bring in the knowledge, expertise and know-how to allow them to safely deploy capital and make money in those countries,” Mr Kapur said.
CAB, which is also licensed in the Netherlands and the US, deals with countries in Africa and is also focusing on South America, Central America and South Asia.
CAB is the latest among a group of global lenders, as well as asset and wealth managers, that have either set up a base in the UAE or invested in solidifying their presence in the country.
Measures introduced by the UAE to attract foreign investment, combined with its position as a gateway to the broader Middle East, Africa and South Asia, has helped it to attract global financial institutions.
The Middle East is in a trade corridor between South-east Asia and Africa, and CAB wants to capture that trade flow by taking risks in jurisdictions which other international banks might not, according to Arif Khan, senior executive officer of CAB Global Markets.
Mr Kapur said most parts of Africa are not supported by large-scale banks, unless it’s South Africa, Morocco, Algeria or Egypt. Countries in Sub Saharan Africa, like Uganda, Kenya, Tanzania, Zambia, Burkina Faso, Mozambique and the Ivory Coast, are neglected by international banks, he said.
He highlighted that Nigeria is one of the biggest areas that CAB has operated in and continues to have a very strong relationship with.
“There is a growing interest from the Middle East in areas that we know well and that is where we wish to bridge the gap and become a facilitator in providing products to help trade and increase the prosperity of those countries,” Mr Kapur said.
The lender is also looking at tapping trade flows from the UAE, Qatar and Saudi Arabia, and later expanding into markets that are conduits of the Middle East, for instance, where there's a lot of remittance flows, Mr Khan said.
Places like India, Pakistan, Bangladesh and Sri Lanka will become the natural next steps to source business from, he added.
