New
UAE Banks Performance
Dubai chamber has recently conducted a study to assess the efficiency of the UAE banking sector in comparison to the GCC. Here are some of the findings: Structure of banks in UAE and GCC The study results reveal that the UAE conventional banking market is not a concentrated market, as market concentration expressed as Herfindahl Index (HHI) is < 1000. While Saudi conventional banking market is moderately concentrated (1000 < HHI < 1800); banking markets in Oman and Qatar are concentrated (HHI > 1800). The HHI is a measure of the size of firms in relationship to the industry and an indicator of the amount of competition among them. It is defined as the sum of the squares of the market shares of each individual firm.UAE versus GCC conventional banks The UAE conventional banks outperformed the GCC banks performance in all key business areas. That is, the compounded annual growth rate (CAGR) of 14% in real assets, 18% CAGR in real loans, and 17% CAGR in real deposits compared to GCC’s CAGR of 9%, 8% and 5% respectively. The potential strengths in these key performance areas imply that the UAE banks have clear competitive edge amongst GCC banks to prudently expand from the deposits mobilized from the private sector in the UAE. In the UAE, only Abu Dhabi conventional Bank, National Bank of Abu Dhabi, and the National Bank of Dubai were among the efficient conventional banks. Interestingly, these banks managed to keep their efficiency level throughout the 2001– 2005 period, and were joined briefly by the Commercial Bank of Dubai in 2003.Comparatively, the conventional banks in the UAE enjoyed a higher average efficiency score than other GCC countries as a whole in 2001. However, country-wise, Kuwait is the most efficient country (with an average of just above 95% efficiency), significantly higher than that of the other countries, including the UAE. The average efficiency score of the banks in the UAE is quite competitive with the rest of the GCC banks, whether conventional or Islamic. The exceptions are Kuwait and Oman with the former, in some years; enjoy significantly higher efficiency in running their banks, and the latter host the least efficient banks in the GCC region. The competitiveness among the other GCC countries seems predictable as the possibility of the movement of capital from one country to the other makes the decision makers, including those of the banks, aware of the importance of their efficiency and hence profitability.|
|
|
|
|
 FEATURES & ARTICLESVISIT OTHER EMIRATESInteresting Links ONLY webinars 4.0 Revolution International Humanitarian City Dubai Restaurants Guide Corporate Gifts Middle East News |
