GCC banks’ rev­enue growth rate plunged back to sin­gle digit

The Pak Banker - - FRONT PAGE -

The bank­ing in­dus­try in the GCC grew at a lower rate in 2015 than it did in 2014 with just a 7.2 per­cent in­crease, stem­ming al­most ex­clu­sively from ma­jor cus­tomer seg­ments such as retail and cor­po­rate bank­ing. Based on the banks' 2015 an­nual re­sults re­leased in the first quar­ter of 2016, the new­est study by The Bos­ton Con­sult­ing Group is part of the com­pany's an­nual bank­ing per­for­mance indices mea­sur­ing the de­vel­op­ment of bank­ing rev­enues (op­er­at­ing in­come) and prof­its for lead­ing GCC banks.

BCG launched the first edi­tion of the bank­ing per­for­mance in­dex in the GCC in April 2009, cre­at­ing a cus­tom­ized in­dex specif­i­cally for the re­gional bank­ing mar­kets, with 2005 rev­enues and prof­its as start­ing bench­marks. The in­dex cov­ers the largest banks in Bahrain, Kuwait, Qatar, Oman, Saudi Ara­bia, and in the UAE.

"The 2015 BCG in­dex in­cludes 45 banks from across the GCC, cap­tur­ing about 80 per cent of the to­tal re­gional bank­ing sec­tor," said Dr. Rein­hold Le­icht­fuss, a se­nior part­ner and man­ag­ing di­rec­tor at BCG's Middle East of­fice. In 2015, Oman banks led the pack in terms of growth num­bers with 9.6 per cent in rev­enues and 10.5 per cent in prof­its. In par­al­lel, UAE banks' rev­enues grew by 8.1 per cent and Kuwait banks recorded a 11.4 per cent profit growth. The spread of rev­enue and profit growth rates be­tween the GCC coun­tries was sig­nif­i­cantly smaller than that of last year, rang­ing from four to 11 per cent.

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