By Alex Warren
THE PAST FEW YEARS have been a fine time to be a banker in the Arab world. Across the region, banks have benefited from the liquidity springing from white-hot oil prices in the Gulf, as well as a thriving retail market and enticing project finance opportunities.
The pace of growth is astounding – “frightening” in the words of one Emirates analyst. According to the latest World Bank report on the Middle East and North Africa (MENA) region, bank deposits rose at an average annual rate of 15% between 2002 and 2005, with resource-rich, labour-importing countries benefiting from more than $30 billion in new deposits every year.
Banks in Gulf Cooperation Council countries in particular have boomed. Almost all notched up record results in 2005; some doubled their profits, all enjoyed a return on equity well above 20% and in some cases in excess of 30%. A return on assets...
