The internationalisation of the Arab Gulf banks
The main theme of the research is to analyse the major reasons behind the international expansion of a large number of Arab Gulf banks. An attempt is made to examine the role of oil revenues of the 1970s in the development and international expansion of Arab banks. The study also analyses the role played by the financial markets of the region (i.e. Kuwait and Bahrain) in encouraging the regional and international expansion of Arab banks. Because of the unique features of the Gulf region a historical approach has been adopted to support an understanding of the present bankign practices of the Arab banks. The study follows the development of Arab Gulf banks since their inception in the 1950s and 1960s, and includes a survey investigating the expansion of these banks into the major international financial centres of Western Europe, the United States and more recently Tokyo. A comparative analysis to the operational aspects of Arab and other international banks is also provided. The survey was carried out through personal interviews with the senior managements of several Arab banks in London, which allows a comparison to be made between the factors that led to the international expansion of Arab Gulf and western banks. The involvement of Arab banks in the syndicated lending and eurobond markets, is closely examined. The study demonstrates that Arab banks' success in the euromarkets was not necessarily based on oil revenues as often assumed, but rather the trade finance of these banks that fuelled their international expansion.