The 2021 report, ‘A new reality’, highlights some of the key financial trends identified in the banking sector across the region, including:

  • Robust asset growth
  • Profitability increase
  • Stable Non-Performing Loan (NPL) ratios
  • Lower loan impairment
  • Further cost efficiencies
  • Rising share prices

2021 followed an unprecedented year where the banking sector was forced to grapple with the far-reaching impact of Covid-19. Despite this challenge and a difficult economic environment, the GCC banking sector emerged resilient and stronger by taking proactive and timely measures, coupled with effective government support, to weather the storm. Our report highlights how: banks placed greater focus on digital transformation; ESG became a priority; NPLs continued to be managed effectively; and agile working practices became the norm, amongst other highlights.

In last year’s report, we made several predictions for the GCC banking sector, including regulators embracing tech; cost and operational efficiencies; declining profitability; ESG gaining prominence; further consolidation; rising NPL and loan impairment; accelerated digital investment; and flexible working patterns. While a number of these predictions were realized in 2021, the sector has emerged far more resilient that one could have anticipated in the peak of the pandemic. The financial results have in fact exceeded expectations.

Looking forward to ‘A New Reality’, key predictions for the sector in 2022 that are explored in this report include: 

  • Increased regulatory oversight
  • Cautious and selective lending
  • Improved Net Interest Margins (NIMs)
  • Effective NPL management
  • Environmental, Social and Governance (ESG) drive
  • Further consolidation
  • Continued digital transformation
  • Declining costs
  • Robust economic environment to support resilience 

Throughout this report, heads of Financial Services from KPMG member firms in the six GCC countries provide views on their respective banking markets, specifically on the financial results of leading listed banks. We hope that our analysis, insights and predictions will continue to help drive banking strategies and shape the industry across the region.