By Satish Kanady

DOHA: The retail banking revenues in the GCC witnessed an uptick of 7.9 percent in 2014, largely due to a 12.5 percent surge in Qatar. Qatar ranked top followed by the UAE and Bahrain. Kuwait witnessed a healthy 6.3 percent growth and banks in Saudi Arabia recorded 3.4 percent growth in their retail revenues.

GCC retail profits maintained single-digit growth in 2014 with 3.6 percent, which is slightly lower compared to 2013 when retail profits grew by 5.8 percent. Banks in Qatar, UAE, Bahrain, and Kuwait have shown higher double-digit growth rates. In parallel, Saudi Arabia and Oman suffered a sharp decline in retail profits.

According to a new study by The Boston Consulting Group (BCG), the banking industry in the Middle East maintained double-digit revenue growth in 2014 with a 10.0 percent increase, stemming largely from major customer segments such as retail and corporate banking as well as international business and treasury.

Based on the banks’ 2014 annual results released in the first quarter of 2015, the newest study is part of BCG’s annual banking performance indices measuring the development of banking revenues (operating income) and profits for leading Middle East banks.

The index includes 40 banks from across the GCC, capturing almost 80 percent of the total regional banking sector, said Dr Reinhold Leichtfuss, a Senior Partner Managing Director at BCG’s Dubai office and the Head of BCG’s Financial Institutions Practice in the Middle East.

In 2014, loan-loss provisions dropped in all countries with the exception of Oman. In fact, banks in Qatar and Kuwait, which achieved high growth rates in 2013, have shown double-digit reductions in loan-loss provisioning. Banks in the UAE and KSA were also able to reduce in the single digits. This is the strongest reduction in LLPs since 2010. In 2014, the growth of bank revenues exceeded the growth in the main customer segments by about 2 percent. This is attributed to several significant acquisitions of foreign banks.

The corporate segment reached a new top index level in revenues in 2014 by growing 8.8 percent. In 2014, banks in Saudi Arabia excelled in corporate banking revenues. On average, profits of GCC banks increased by 17.1 percent, as a result of strong increases in revenues of banks in Qatar, Saudi Arabia and UAE..

“In 2014, 80 percent of the banks in the region were able to achieve growth as a result of positive market developments which facilitated revenue growth and reductions in loan-loss provisions,” said Dr Leichtfuss.

About 15 to 25 banks achieved double-digit growth rates both in revenues and in profits, while three to eight banks witnessed negative growth in revenues or profits overall or across customer segments.The Peninsula