Mideast ‘to see more banking mergers’
THE Arab region will see more mergers and acquisitions of banks, a senior banker has said.
According to Adnan Ahmed Yousif, Chairman, Union of Arab Banks, the banking landscape in the region was fast changing and banks either needed to merge with others or go in for acquisition to stay fit.
A recent example is the merger of two major banks in Dubai. Emirates Bank International and National Bank of Dubai merged to create the Gulf’s largest bank by assets.
Yousif said intra-country and inter-country mergers and acquisitions would happen eventually.
“The scene is wide open. The international banks can enter the fray and take on local banks. If the local banks do not go in for acquisition, they can be acquired,” he said.
Asked whether international banks posed a threat to local banks, he said: “International banks cannot cater to the needs of the Arab region as local banks do. They are not entering the region to take on its risks. They are coming here for structured deals or to provide assistance to certain projects.
“They don’t necessarily go and provide assistance to small and medium scale businesses and institutions in the region. The international banks have their own business criteria and thinking.”
He said it was a wrong notion that Arab banks were incompetent to handle project finance.
“We are absolutely capable of handling the project finance portfolio. But because most of the projects are huge and happening at the same time, there is a lot of pressure on us. Hence we need to either group together or join European or American banks in financing these mega projects,” said Yousif, who is the president and chief executive officer of the Albaraka Banking Group in Bahrain.
The consolidated balance sheet of Arab banks showed assets in excess of $1.6trn in 2006, up from $1.2trn in the previous years.
The net profit earned by the Arab banks stood at $25bn in 2006, he said. He said the Arab banks had come of age and harnessed technology that helped them compete with international banks.
“A few years ago, many of our member banks did not have the Internet banking portfolio. Now a majority of the 450 and odd Arab banks have Internet banking and other electronic delivery channels,” Yousif told Gulf Times yesterday.
He also said most of the Arab banks had already complied with the Basel-II requirements for cross-border business. Source
According to Adnan Ahmed Yousif, Chairman, Union of Arab Banks, the banking landscape in the region was fast changing and banks either needed to merge with others or go in for acquisition to stay fit.
A recent example is the merger of two major banks in Dubai. Emirates Bank International and National Bank of Dubai merged to create the Gulf’s largest bank by assets.
Yousif said intra-country and inter-country mergers and acquisitions would happen eventually.
“The scene is wide open. The international banks can enter the fray and take on local banks. If the local banks do not go in for acquisition, they can be acquired,” he said.
Asked whether international banks posed a threat to local banks, he said: “International banks cannot cater to the needs of the Arab region as local banks do. They are not entering the region to take on its risks. They are coming here for structured deals or to provide assistance to certain projects.
“They don’t necessarily go and provide assistance to small and medium scale businesses and institutions in the region. The international banks have their own business criteria and thinking.”
He said it was a wrong notion that Arab banks were incompetent to handle project finance.
“We are absolutely capable of handling the project finance portfolio. But because most of the projects are huge and happening at the same time, there is a lot of pressure on us. Hence we need to either group together or join European or American banks in financing these mega projects,” said Yousif, who is the president and chief executive officer of the Albaraka Banking Group in Bahrain.
The consolidated balance sheet of Arab banks showed assets in excess of $1.6trn in 2006, up from $1.2trn in the previous years.
The net profit earned by the Arab banks stood at $25bn in 2006, he said. He said the Arab banks had come of age and harnessed technology that helped them compete with international banks.
“A few years ago, many of our member banks did not have the Internet banking portfolio. Now a majority of the 450 and odd Arab banks have Internet banking and other electronic delivery channels,” Yousif told Gulf Times yesterday.
He also said most of the Arab banks had already complied with the Basel-II requirements for cross-border business. Source
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