Corporate and investment banking (CIB) revenues across the Gulf Cooperation Council (GCC) region have expanded to more than $50 billion over the last few years.
Between 2021 and 2024, revenues surged by around 14% annually, more than double the region’s historical CAGR of around 6%, bringing total CIB revenues to between $55 billion and $65 billion, according to McKinsey & Company.
The figure is forecast to jump to $90 billion to $100 billion by 2030. However, the region faces “increasingly complicated challenges”, including the impact of oil price volatility, corporate tax increases, low interest rates and geopolitical dynamics.
“Maintaining the growth of recent years is not guaranteed, given the potential impact of challenges,” the consulting firm said.
“Mid-to longer-term volatility in oil prices, geopolitical dynamics and corporate tax increases are all potential headwinds.”
More specifically for banks, McKinsey said funding shortages must be addressed, citing that loan-to-deposit ratios are about to hit or have surpassed 100% in half of all GCC states.
To maintain high CIB revenues, banks in the region are urged to take necessary steps, such as expanding and innovating transaction banking, as well as foreign exchange; expanding offerings beyond traditional finance into capital markets and trading; and diversifying lending portfolios, among others.
(Writing by Cleofe Maceda; editing by Seban Scaria) seban.scaria@lseg.com
