Hong Kong to allow lenders from Qatar, UAE to advise on local banking sector in a boost to financial ties with Middle East

Strong economic ties between the UAE and Hong Kong have laid the foundation ‘for our banking and investment ecosystems to mutually thrive and optimise’, HKMA chief says
The countries’ inclusion in a list of constituent regions will give their banks a say in the development of Hong Kong’s banking sector

Banking & finance

Iris Ouyangin Shenzhen

Published: 7:40pm, 6 Jun 2023

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Hong Kong is set to allow banks from Qatar, the United Arab Emirates (UAE) and Liechtenstein to advise on industry issues in the city, a step that will enhance collaboration especially between Hong Kong and the Middle East.

The Panel on Financial Affairs of Hong Kong’s Legislative Council has proposed an amendment to a segment of the Hong Kong Association of Banks (HKAB) Ordinance, which will add the three countries to a list of constituent regions that currently comprises 21 regions and territories.

The move is seen as paving the way for more cooperation between Hong Kong and the Middle East as they step up interaction in areas such as finance, technology and logistics. The proposal comes less than a week after Eddie Yue Wai-man, CEO of the Hong Kong Monetary Authority (HKMA), the city’s de facto central bank, made a three-day visit to the UAE to promote Hong Kong’s strengths as a leading international financial centre.

“The strong economic ties between the UAE and Hong Kong lay a solid foundation and practical need for our banking and investment ecosystems to mutually thrive and optimise,” Yiu said during a lunch with around 80 senior representatives from more than 50 local financial companies in Dubai on May 31.

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“As we are forging ahead with our new initiatives to fortify our ecosystem and create new opportunities, Hong Kong certainly has much to offer.”

The proposal to include Qatar, UAE and Liechtenstein banks, which was published on Tuesday, is expected to be presented to the consultative council, the HKAB’s highest executive body, for formal discussions within this year. The move is being viewed as necessary because a number of banks from these countries are licensed in Hong Kong under the HKAB Ordinance. All licensed banks in the city are required to become members of HKAB, which currently has around 152 members.

Eddie Yue, CEO of the Hong Kong Monetary Authority, made a three-day visit to the UAE to promote Hong Kong’s strengths as a leading international financial centre recently. Photo: Bloomberg

Currently, the consultative council comprises local and elected members from the list of constituent regions. The council advises the HKAB on issues related to the business and development of the local banking sector.

“The proposed amendments of Schedule 1 [list of constituent regions] aim to facilitate the banks to be eligible to [become] elect members, or to be elected to the consultative council, hence enabling all current member banks of the HKAB to be regionally represented on the consultative council,” the proposal said.

Hong Kong has been making efforts to attract investment from the Middle East for awhile now.

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Yiu was accompanied on his trip late last month by Sun Yu, vice-chairman of Bank of China (Hong Kong) and chairman of HKAB, David Liao, Asia-Pacific co-CEO of HSBC, Benjamin Hung, Asia CEO of Standard Chartered Bank, and Aveline San, Hong Kong and Macau CEO at Citi.

The officials and executives from major banks in the city showed Hong Kong’s “value propositions as a dominant gateway to mainland China, a leading offshore Renminbi business centre, and an international fintech and green finance hub”, the HKMA said in a statement on June 1.

In February, Chief Executive John Lee Ka-chiu, the city’s leader, led a delegation to the region amid a warming of ties between mainland China and the Middle East. He touted Hong Kong as the Middle East’s “one-stop Belt and Road centre for capital formation and for all the professional services they need to plan, build and manage their Belt and Road future”.

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The city has also been trying to convince companies from the region to issue bonds and list shares – such as secondary listings by Saudi Arabian oil giant Aramco and its units – in Hong Kong to ramp up its initial public offering pipeline.

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