The fifth edition of KPMG’s Gulf Cooperation Council (GCC) listed bank results report, analyzing the financial results for leading listed commercial banks across the GCC, comparing these with the previous year. The report provides banking industry leaders with succinct analysis, comparing banking sector key performance indicators across the GCC, and furnishes forward-looking views and insights.
The 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.
Last year, we made a number of predictions in specific areas including: regulatory reform; customer focus; cost efficiencies; credit and profit growth; capital/fundraising; consolidation, and technological investments, with many of these predictions being realized in 2019.
Looking forward, key predictions for the sector in 2020 explored in this report include:
- Continued customer focus through innovation
- Cost and operational efficiencies will remain a priority
- Limited asset and profit growth
- Increasing capital and fundraising activity
- Further consolidation
- Rethinking of business models.
Throughout this report, heads of Financial Services from KPMG member firms in the six GCC countries, provide their opinion on their respective banking markets, specifically on the results of the leading listed banks. We hope that our analysis, insights and predictions will help drive banking strategies and shape the industry across the region in the future.
Head of Financial Services
KPMG in Saudi Arabia