In our fifth GCC listed banks’ results report we analyzed the published financial results of most listed commercial banks across Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates for the year ended 31 December 2019.
This report, titled ‘New Age Banking’, focusses on some of the key financial trends identified in the banking sector across the region, including:
— asset and profitability growth
— modest cost efficiencies
— higher share prices
— higher NPL ratios
— increased loan impairment charges.
The financial trends identified through our analysis were largely positive, which, given the unique political and economic circumstances the region has witnessed in recent years, is particularly impressive, reflecting the continued resilience of the banking sector. This report highlights the optimism on the back of these positive financial results, which coupled with the increasing focus on ‘digitization’ in the region, has resulted in banks moving toward a more innovative approach. With the constant advancement and evolution of technology, we are witnessing banks gear up for this ‘new age banking,’ albeit in a measured manner.
As the preparation of this report is underway, we are going through an unprecedented pandemic, unlike anything that the current generation has experienced, which will have a major impact on economies across the globe. The increased optimism immediately after the end of 2019 referred to above will now clearly be affected, and given the current uncertainties, banking leaders will be compelled to rethink their strategies and business models for the future. However, it is clear that banks that have been, and will continue to be, more nimble, agile and responsive to the digital agenda, will succeed in the long term. This has become even more apparent in the current crisis where branches are closed, face-to-face contact is limited, and the demand for digital banking channels has soared.
The Kuwait banking sector experienced healthy growth of 8.2 percent in total assets with a marginal decline in net profits by 0.9 percent, mainly on account of higher expected credit losses in 2019. The Kuwait banking sector is well capitalized with the average CAR at 18 percent in 2019.
The third edition of the GCC listed banks report analyzes the 2017 financial results of the leading listed banks from across the GCC.