Banks in Middle East managed to survive in the period of global crisis on the back of extensive market reforms and revival in oil and gas prices.
As recently revealed by Dr Omar bin Sulaiman, Vice-Chairman of the UAE Central Bank and Governor of the Dubai International Financial Centre (DIFC), the Middle East banking sector has successfully rode out the global economic recession and is well-poised for growth in the wake its widespread regional market reforms as well as revival in the oil and gas prices, reported
Khaleej Times on October 14, 2009.
Addressing the three-day Banking Outlook Middle East 2009 Conference, Dr Sulaiman sounded very optimistic on Dubai’s resilience and stated that the worst phase has ended. He added that the private sector should show interest in the second tranche of $10 Billion lined up for Dubai’s $20 Billion bond.
The latest annual banking indices from Boston Consulting Group suggest that there has been substantial increase in loan loss provisions (LLPs) of the Middle Eastern banks, and have often surpassed the annual growth rate of 100% in the past four years.
The top 25 banks in the country together built LLPs of around $7 Billion (Dh25 Billion). The largest banks in Kuwait, Bahrain, Saudi Arabia, UAE and Qatar were covered in the index.
The experts appreciated the Middle East banking sector for riding out this adverse phase, that too without any systemic or institutional failures. This sufficiently reflects the potential of the banking industry in the region.
A latest research report from
RNCOS titled “
Middle East Banking - Corporate Loan a Hot Opportunity” further confirms the positive outlook of the Middle East’s banking industry. According to the report, despite representing small asset value as compared to the rest of the world, the region is far ahead of the world as far as the growth is considered. The report projects the banking assets of the firm to grow at a CAGR of around 18% during 2009-2012.
According to a Research Analyst at
RNCOS, “Middle East banking industry would be largely benefited from the centre of gravity of the global economic activities shifting east. However this trend started two decades back, but it has recently gained pace by the worldwide recession. Moreover, banks in Middle East, because of their closeness to the Asian markets, appear well-positioned to tie-up with partners in India, China, Central Asian and other countries, thus making their way into these emerging markets.”
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