A new study has predicted that banks across the UAE will see revenue and profit growth stagnate this year.
According to the research by the Boston Consulting Group, UAE banks are set to lag behind international rivals that are seeing profits bounce back after the troubles of the last few years.
Following years of booming expansion, GCC banks’ revenue growth would slow to single digits this year, with the revenues of the UAE expected not to grow at all, the study said.
UAE banks were estimated to see a 2 per cent loss of profits overall. Only Oman was expected to perform worse, with profits expected to shrink by 11 per cent.
Banks in the UAE had previously been among the region’s star performers, showing an average annual growth of 21 per cent since 2005. However, this growth has now all but dried up.
Dr Reinhold Leichtfuss, the managing director of the Boston Consulting Group, said the coming period of low revenue growth would spur bank chiefs in the region to make ever more ambitious moves.
“Banks have to get ready to become more competitive,” he said. “You’ll have to steal away market share from your competitors.”