More banks in the Gulf Cooperation Council (GCC) region are likely to consolidate amid challenging economic conditions and low oil prices, a top UAE bank official hinted on Wednesday.
The mergers and acquisition space in the region have seen increased levels of activity in recent years, with lenders scaling down to remain competitive in a tight business environment. Prior to the coronavirus pandemic, growth in economies like the UAE – which has been suffering a real estate downturn - was already quite sluggish and certain markets were overbanked.
“The ongoing consolidation of the banking sector in the GCC region is expected to continue with constrained growth opportunities and lower oil prices,” said Mohammed Ibrahim Al Shaibani, chairman of Dubai Islamic Bank (DIB).
The UAE-based lender acquired its competitor Noor Bank in a transaction structured through a share swap in January this year, shortly before the global coronavirus lockdown. The acquisition involves integrating Noor’s operations into DIB’s.
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