Traditionally, Islamic banks have outperformed their conventional peers in most markets. However, a closer look suggests the market dynamics are changing, demonstrating a new trend.
Two key indicators are cause for reflection: slowing growth rates and eroding profitability, according to A.T. Kearney, a global management consultancy.
Declining growth rates are occurring in key geographies including KSA, Bahrain and the UAE, where growth rates have dropped to between 3%- 8% from double-digit figures. In parallel cost income ratios are increasing in most markets, putting pressure on profitability.
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