Abu Dhabi's First Gulf Bank said yesterday an affiliate had won approval to start operations in North African oil-producing nation Libya.
Libya, with a population of five million and the biggest holder of oil reserves in Africa, is moving to modernise its banking system but faces an uphill task in a command economy where cash is still king, where firms struggle to get credit and reforms can fall prey to influential opponents.
First Gulf, the second-biggest bank in Abu Dhabi by market value, said it in a statement it would own half of First Gulf-Libyan Bank, with the Libyan Government's Economic and Social Development Fund owning the other half.
"The Central Bank of Libya announced today that it had granted the approval to start its operations in Libya," the lender said. It did not give further details.
Gulf-Libyan will have authorised capital of $400 million (Dh1.46bn) and paid-up capital of $200m, it said in September.
Qatar National Bank, Qatar's largest bank by assets, said in April it had opened an office in Libya as part of regional expansion plans. First Gulf is looking to expand overseas as it faces growing competition in its home market.
The lender, which has started operations in Singapore, plans to open offices in London, Shanghai, Doha and India this year, as well as a branch in Algeria in the next few months, said its chief executive officer Andre Sayegh in April.
Shares in First Gulf Bank closed 1.52 per cent up on Tuesday.
The stock is up almost 14 per cent this year, outperforming the market, which has gained just over nine per cent.