UAE most competitive banking market in Gulf
January 14th, 2012 - 1:47 pm ICT by IANSAbu Dhabi, Jan 14 (IANS/WAM) The United Arab Emirates (UAE) remains the most competitive banking market in the Gulf region, a report by the Abu Dhabi Islamic Bank (ADIB) has said.
The “Gulf Cooperation Council Banking Competitiveness Report” said the UAE’s population of approximately eight million is served by 51 banks with more than 840 branches and over 4,000 ATMs, which deliver high levels of service yet lower profitability than their GCC counterparts.
The ADIB report said the UAE banks’ net interest margin — which is the difference between what banks pay for deposits and what they charge for financing and loans — remains the lowest among the GCC, at an average of 2.9 percent.
In Saudi Arabia, the net interest margin is currently 3.5 percent, in Qatar 3.4 percent and in Kuwait banks 3.2 percent.
The ADIB has urged banks across the region to improve their levels of competitiveness if they are to ensure their continued strength in the challenging global economic environment and meet the needs of customers in a better way.
Comparing the No.1 and No.2 banking markets by size in the GCC — the UAE and Saudi Arabia — the global head of strategy and finance at the ADIB, Andrew Moir, said: “Despite the fact that the UAE is a bigger banking market in terms of assets, it remains less profitable than that of Saudi Arabia.”
“In the UAE, the mix of deposits, low customer charges, the presence of high levels of non-performing assets and competitive dynamics have negatively impacted banking profitability and capital ratios. However, lower net interest margin means consumers in the UAE are getting better rates overall but shareholders are getting lower returns as compared to those in other GCC markets,” he said.
The “GCC Banking Competitiveness Report” of the ADIB is updated on a quarterly basis by the bank’s strategic planning department.
The report focuses on various points that reflect both Islamic and conventional banks’ structures and performance, ranging from customer growth, staff and service to product trends and performance, financial indicators, investor insights, capital trends, liquidity, cost of funds and overall price dynamics.
Financial performance and profitability are key components of the report.
–IANS/WAM
pm/tb
- Abu Dhabi Islamic Bank opens branch in Iraq - Jul 26, 2012
- Foreign ministers of Turkey, six Gulf nations meet - Jan 29, 2012
- Abu Dhabi to host GCC monetary agencies meet Thursday - Mar 09, 2011
- 200-year-old Ka'aba shroud goes on display in UAE - Aug 07, 2011
- Abu Dhabi to host 2012 Global Financial Markets Forum - Jan 27, 2012
- Etisalat posts $517 mn profit - Jul 26, 2012
- Symposium on non-tariff trade barriers in Abu Dhabi - Apr 19, 2011
- First Gulf Bank posts $238 mn profits - Apr 25, 2011
- UAE, Oman discuss trade barriers - Jan 25, 2012
- Etihad to increase flights to Riyadh - Sep 20, 2011
- UAE to host GCC financial, economic committee meet - Oct 20, 2011
- Gulf foreign ministers meet to set GCC agenda (Lead) - Dec 06, 2010
- Abu Dhabi Commercial Bank posts $158 mn profits - Apr 27, 2011
- Gulf Cooperation Council summit opens in Abu Dhabi - Dec 06, 2010
- Abu Dhabi sends five tonnes of dates to Saudi Arabia - Jul 15, 2012
Tags: abu dhabi islamic bank, adib, capital ratios, competitive dynamics, competitiveness report, conventional banks, customer charges, gcc markets, global economic environment, global head, gulf cooperation council, interest margin, kuwait banks, moir, net interest, non performing assets, quarterly basis, saudi arabia, strategic planning department, united arab emirates