GCC banks profitability rose in 2021 as revenues surged, provisions fell
- Date: 31-Mar-2022
- Source: Zawya
- Sector:Financial Services
- Country:Gulf
GCC banks profitability rose in 2021 as revenues surged, provisions fell
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Profitability for the GCC banking sector rose 40% to 35 billion during 2021 to reach one of the highest yearly levels, albeit below pre-pandemic profits of 37 billion reported in 2019.
According to a report on the sector by Kamco Invest, the year-on-year (y-o-y) increase in 2021 was broadly across the GCC with profits for Kuwaiti banks almost doubling to $2.9 billion.
Saudi Arabia and UAE-listed banks also reported healthy profit growth of over above 40% and 52.6% respectively during the year.
Higher profits also pushed the aggregate return on equity for the sector to a seven-quarter high level of 10.4% at the end of 2021 as compared to 9.6% in Q3-2021 and 8.1% at the end of 2020.
The profit growth was led by an increase in total bank revenue as well as a decline in loan loss provisions. Total bank revenue increased by 6.9% to reach $90 billion during 2021, one of the highest on record mainly led by a growth of 17.6% in non-interest income and supported by a relatively smaller growth of 2.3% in net interest income.
Revenue growth was broad-based across the GCC with Qatari banks reporting the biggest growth of 9.9% followed by UAE and Kuwaiti bank revenue growth