The GCC\u2019s banking sector’s overall outlook is positive according to KPMG\u2019s GCC listed bank results report, which analyses the published 2016 financial statements of 56 leading listed commercial banks across GCC. The report, which covers over 90 percent of the region\u2019s listed banking assets, indicates that banks have performed well over the last 12 months considering margin compressions, increased impairment charges, and increased funding costs. Overall, net profit has declined year-on-year for the first time in recent years; asset growth has remained robust at 6.5 percent on average across the region.<\/p>\n\n\n\n
Commenting on the results, Omar Mahmood, Head of Financial Services for KPMG in the Middle East and South Asia, said, \u201cIn what has been a politically eventful year globally, most of the banking sector-specific challenges have remained the same over the past 12 months, and the drop in profits reflects this. However, with challenges come opportunities, and we are increasingly seeing banks looking to create efficiencies and find innovative ways to stay ahead.<\/p>\n\n\n\n
One example of this is the gradual shift from banks looking to win the battle of the balance sheet\u2019 towards a focus on the battle of the customer\u2019 with banks looking at new ways to ensure loyalty by taking a customer experience focussed approach.\u201d<\/p>\n\n\n\n
\u201cProfitability for the listed banks, in the Saudi Stock Exchange, in 2016 has slightly decreased by 5.4% as compared to the previous year. It was a result of a higher impairment charge on loans and advances which increased 44.7% in 2016 in comparison with 1.5% in 2015, while return on assets slightly decreased across almost all banks given the challenging market conditions\u201d, said Adrian Quinton, Head of Financial Services for KPMG in Saudi Arabia.<\/p>\n\n\n\n
Quinton went on to say: \u201cSaudi banks faced a very challenging year in 2016. However, the positive measures are taken in 2016, including Vision 2030, should translate into a positive long-term outlook for the sector\u201d.
Changing global regulatory requirements has clearly impacted the GCC sector, with several positive changes being made to bring banks in line with new requirements. Capital adequacy ratios now stand at over 18 percent across the region \u2013 above the minimum limits set in Basel III, reflecting effective capital-raising activity. Similarly, Basel III requirements are the likely reason for a rise in liquidity ratios across most countries, demonstrating a commitment to adhere to broader global regulations.<\/p>\n","protected":false},"excerpt":{"rendered":"
The GCC\u2019s banking sector’s overall outlook is positive according to KPMG\u2019s GCC listed bank results report, which analyses the published 2016 financial statements of 56 leading listed commercial banks across GCC. The report, which covers over 90 percent of the region\u2019s listed banking assets, indicates that banks have performed well over the last 12 months […]<\/p>\n","protected":false},"author":2,"featured_media":5474,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_yoast_wpseo_meta-robots-noindex":"","_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","_pr_autopilot_social_copy":"","_yoast_wpseo_opengraph_title":"","_yoast_wpseo_opengraph_description":"","_yoast_wpseo_opengraph_image":"","_yoast_wpseo_opengraph_image_id":0,"_yoast_wpseo_twitter_title":"","_yoast_wpseo_twitter_description":"","_yoast_wpseo_twitter_image":"","_yoast_wpseo_twitter_image_id":0,"_yoast_wpseo_primary_category":24,"_extra_hide_author_box":"1","_extra_featured_post":"","_partner_post_id":0,"footnotes":""},"categories":[24],"tags":[],"class_list":["post-5472","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","et-has-post-format-content","et_post_format-et-post-format-standard"],"yoast_head":"\n