GCC banks' profitability set to recover
Manama, December 15, 2011
GCC corporate banking profitability is on its way to recovering from the turmoil of the financial crisis, according to the latest report by the Boston Consulting Group (BCG).
According to the firm's recently released Corporate Banking Benchmarking Report, as loan loss provisions (LLPs) peaked in 2009, corporate banking profitability consequently declined to levels below those of 2007.
However, LLPs began to decrease in 2010 and have continued to decrease in the first half 2011.
'This has resulted in a corporate banking profitability increase of over 40 per cent from 2009 levels even as revenues have remained flat throughout 2009-2010, and the first half of 2011,' said BCG partner and regional leader in wholesale banking and capital markets Markus Massi.
Saudi Arabia has been at the forefront of this upward profit trend with the greatest annual increase in corporate banking profitability at 45 per cent per year since 2009.
The UAE is the only other country which has shown a small but upward trend in profitability, increasing by 3 per cent from 2010.
Other GCC countries have shown a flat trend in profitability with the exception of Bahrain which has continued its downward profitability trend since 2007, decreasing at 24 per cent per year up to the first half of 2011.
BCG surveyed top corporate banking executives from some of the largest banks in the GCC to get insights into their expectations and to understand how banks are gearing up to take advantage of the u percentoming trends in corporate banking. – TradeArabia News Service
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