Oil hike provides respite for most
To date, most Arab countries have been insulated from outside pressure due to highly protected markets and huge oil reserves. But foreign competition is set to increase, especially for markets joining the World Trade Organization. The biggest banks in small countries will have to look outside their domestic markets for growth, either through acquisitions or alliances. Darren Stubing reports
The beneficial effects on regional domestic economies of a higher oil price from the middle of last year onwards meant that Arab banks generally enjoyed a steady 1999.
|Bahrain: Gulf International Bank, like Arab Banking Corp, is expanding in the region|
However, it is in the results for this year that the full effects of the oil price rise will be reflected and the many positive First-half 2000 bank Figures already are showing the trend.
Most Arab countries will have good rates of growth in GDP this year, particularly within the Gulf Co-operation Council (GCC) region (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE). The GCC states provide 61 of the top 100 Arab banks. And the top 20 banks ranked on capital are largely from Saudi Arabia, the UAE and Bahrain. The largest 20 represent 52% of the combined asset base but 58% of consolidated net profit.