KUWAIT (REUTERS) - China's biggest bank, Industrial and Commercial Bank of China, got final approval on Sunday to open a branch in Kuwait, which wants to free up its banking sector.
In March, Kuwait said it would allow foreign banks to open multiple branches to spur growth. Analysts said it was unlikely that many banks would take advantage of the offer unless the government accelerated long-postponed infrastructure projects.
Allowing foreign banks to expand in Kuwait will encourage competition and the development of banking products and services, governor Mohammad al-Hashel said in a statement on the central bank website (www.cbk.gov.kw).
He said the central bank had put ICBC in the official register of foreign banks after it got approval from the Finance Ministry to open a branch.
ICBC got approvals last year from Kuwait's central bank and cabinet. It will be the bank's fourth branch in the Gulf Arab region after Doha, Abu Dhabi and Dubai.
ICBC's chairman said earlier this year his bank could be a"liaison" between Chinese companies and Kuwait, according to a report on Kuwait's state news agency KUNA. Jiang Jianqing said he welcomed opportunities for investment in Kuwait's development plan, KUNA said.
The development plan, first announced in 2010, seeks to spend billions of dollars on major infrastructure projects such as roads, a new airport and refinery.
Foreign banks in Kuwait, a major oil exporter, include regional lenders such as National Bank of Abu Dhabi and Qatar National Bank, as well as international heavyweights BNP Paribas, Citigroup and HSBC .
International names have been able to operate in the country since 2004 but, until this year, had only been able to open one branch. This is ICBC's first branch.
Other restrictions on foreign banks in Kuwait have limited them to offering investment banking services and banned them from competing in the retail sector. It is not immediately clear when these restrictions might be eased.