The GCC banking sector continued to grow rapidly in the first half of 2012, according to QNB Group analysis.
The collective assets of the largest 50 banks in the region increased by 7.7 per cent in the year to June 30, 2012, reaching $1.28 trillion. Profits were also up by 5.4 per cent, compared to the first half of 2011, reaching $12 billion.
While 76 per cent of banks in the group were profitable, with average profit growth of 13 per cent, only 11 out of 50 saw a decline and only one bank in the group recorded a net loss
GCC banks have benefited from the buoyant regional economy, supported by high oil prices and high levels of government spending.
They have also avoided exposure to many of the problematic financial instruments, such as peripheral Eurozone debt and mortgage-backed securities, that have been weighing heavily on banks’ performance in Europe and the US.
The banking sector is skewed towards the very largest banks, with the top 10 representing 50 per cent of total assets. Saudi and Emirati banks make up the bulk of the top 50, in terms of both number-12 and 14 respectively-and aggregate assets, 33 per cent and 28 per cent respectively.
Qatar is in third place, and eight of its banks are included in the group, representing 13.5 per cent of total assets. 15 of the top 50 banks are Islamic and represent 19.5 per cent of total assets.
The strongest growth in assets was achieved in Qatar and Oman, by 20.1 per cent and 19.0 per cent respectively. The assets growth in Qatar was driven by QNB, which is the largest bank by assets in the GCC and achieved 25.5 per cent growth in the year to 30 June 2012.
The other 7 banks also averaged a strong growth rate of 14.7 per cent, led by Qatar Islamic Bank and Masraf Al Rayan. Qatar’s nominal GDP grew at an annualised rate of 17 per cent in the first quarter of the year, and booming economic activity usually contributes to strong bank asset growth.
Only two Omani banks are included in the top 50, and both saw strong asset growth-23.3 per cent for National Bank of Oman and 17.6 per cent for Bank Muscat.
Regional assets growth was driven by an expansion in loan portfolios, which grew by 13.6 per cent during the first half of the year. Growth was particularly strong in Qatar, where loans surged by 39.7 per cent, largely due to a 55.9 per cent increase at QNB, which was the most rapid for any bank in the region. QNB has the largest loan book in the region.