Arab Today, arab today bcg gcc corporate banking at peak levels
Last Updated : GMT 01:04:00
Arab Today, arab today
Arab Today, arab today

BCG: GCC corporate banking at peak levels

Arab Today, arab today

Arab Today, arab today BCG: GCC corporate banking at peak levels

Riyadh - Arab Today

GCC banks’ corporate banking divisions are at peak levels in terms of revenues and net profits, and have even crossed the pre-crisis levels seen in 2008, according to a recent study published by the Boston Consulting Group (BCG). “This impressive performance is even more apparent when compared to the same banks’ retail banking divisions, where revenues and net profits have barely touched 2008 levels, BCG stated. In its Corporate Banking Benchmarking Report, BCG highlights a “multi-speed world” for the corporate banking divisions of banks across the globe and highlights positive growth for GCC markets in this context. When the performance of a set of leading GCC banks who participated in BCG’s corporate banking benchmarking is examined, the GCC markets’ comeback is further evident compared to those in other geographies. At 12 percent, this set of GCC corporate banks have witnessed some of the highest growth rates between 2009 and 2011 among all geographies surveyed. Globally, while banks in Europe are still reeling under pressure in the aftermath of the financial crisis with limited growth or declines in revenues, corporate banking divisions of banks in the GCC, the United States, Asia, Rapidly Developing Economies (RDEs) and Advanced Resource Economies (Canada and Australia) are showing improved performance with high single-digit and even double-digit growth. Interestingly, GCC corporate banks appear to be lagging behind when compared on the basis of other key aspects like return on regulatory capital. Close to two-thirds of GCC corporate banking divisions are not returning the generally expected 16 percent cost of equity hurdle. “While banks have been able to increase their revenues and even profits by extending more credit and keeping loan losses in check, they have been limited in their options of diversifying their source of revenues away from standard credit offerings. This has led to no real improvement in the return on regulatory capital in spite of increasing revenues,” said Markus Massi, partner and managing director, BCG’s regional leader in wholesale banking and capital markets and author of the study. The findings become even clearer when taking a disaggregated view of banks’ performance. Corporate banking segments (whether micro/small, mid or large) within the corporate banks in the region, which have smaller percentages of revenues from credit and have performed well on most of the levers of BCG’s blue-chip corporate bank framework, have shown higher return on regulatory capital. In contrast, business segments with high or very high percentages of their revenues coming from lending products and are also performing badly on many or all of these levers are far below the ideal hurdle rate of 16 percent return on equity (ROE). The report highlights that corporate banks will need to adopt a segment-specific approach to setting target returns in order to create incentives aligned with equity investors’ interests, as all segments cannot be measured against one single target ROE hurdle rate. “GCC banks tend to have wider variation in performance as compared to their counterparts in developed markets across almost all key matrices. This clearly shows the developing nature of the market and the development stage of individual banks, as we see top performing banks able to pull performance levers in a more superior manner,” added Mohammed Turra, principal in BCG’s Dubai office and co-author of this report. Source: ArabNews

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today bcg gcc corporate banking at peak levels Arab Today, arab today bcg gcc corporate banking at peak levels

 



Arab Today, arab today
Arab Today, arab today Prepares to present her new collection

GMT 14:29 2017 Monday ,20 February

Prepares to present her new collection
Arab Today, arab today Tourism shows signs of recovery

GMT 09:59 2017 Monday ,20 February

Tourism shows signs of recovery
Arab Today, arab today Sarah Belamesh designs antiques of "ceramic"

GMT 19:45 2017 Monday ,20 February

Sarah Belamesh designs antiques of "ceramic"
Arab Today, arab today Optimism on the front line

GMT 07:24 2017 Monday ,20 February

Optimism on the front line
Arab Today, arab today Murder of 2 reporters in Dominican Republic

GMT 22:45 2017 Thursday ,16 February

Murder of 2 reporters in Dominican Republic
View News in Arabic - Business: مصارف
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Kidogo provides childcare for underserved

GMT 20:24 2017 Wednesday ,15 February

Kidogo provides childcare for underserved
Arab Today, arab today Tragic fluctuations of Bakhtiari's life revealed

GMT 06:50 2017 Wednesday ,15 February

Tragic fluctuations of Bakhtiari's life revealed
Arab Today, arab today London to tax old cars

GMT 14:06 2017 Friday ,17 February

London to tax old cars
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Nissan enhances sales in most markets

GMT 14:08 2017 Monday ,20 February

Nissan enhances sales in most markets
Arab Today, arab today Competes Sweden and Germans by S90

GMT 22:36 2017 Thursday ,16 February

Competes Sweden and Germans by S90
Arab Today, arab today Egypt to hold first session of Arab film festival

GMT 21:11 2017 Saturday ,18 February

Egypt to hold first session of Arab film festival
Arab Today, arab today Teach monkeys to recognize themselves in mirror

GMT 20:41 2017 Wednesday ,15 February

Teach monkeys to recognize themselves in mirror

GMT 07:30 2017 Saturday ,18 February

Actress Nadeen Al Rassi views art as her entity

GMT 06:40 2017 Friday ,10 February

MP calls for removing text from Islamic story

GMT 19:10 2017 Friday ,17 February

Hats, scarves add beauty to women

GMT 10:26 2017 Tuesday ,14 February

Emergency UN meeting in Harare

GMT 23:29 2017 Thursday ,16 February

Home built on sand castles-style costs $8m

GMT 21:49 2017 Thursday ,16 February

Scientists develop new therapy

GMT 19:16 2017 Friday ,17 February

Aziz House ready to host the tourists

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 12:39 2017 Monday ,20 February

newest smartphone another winner for Huawei

GMT 13:16 2017 Tuesday ,14 February

First fashion model with Down syndrome
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday