Merger activity is sweeping across the Gulf Co-operation Council’s (GCC's) banking markets as a host of economic pressures hit the region’s lenders. Over the past 18 months a number of deals have been agreed or executed that are likely to reshape the region’s banking landscape. Meanwhile, other mergers and acquisitions (M&A) – that are subject to ongoing discussions – point to a continuation of this trend over the next two years.
“Consolidation is being driven by a combination of lower oil prices, which has slowed economic growth, and stiff competition as numerous banks serve small populations. We believe the trend will be beneficial for the sector, boosting profitability through operational synergies and giving the banks greater pricing power,” says Ashraf Madani, vice-president and senior analyst at ratings agency Moody’s.
