Arab Banking: No Place Like Home

• Published in: Euromoney 1992-09, p.245
• Main Authors: Jackson-Moore, Elisabeth, Sophroniou, Sonny
• Format: Magazinearticle
• Language: English
• Subjects: Banking industry; Banking law; Capital requirements; Central banks; Commercial banks; Deficit financing; Industrywide conditions; Liquidity; Losses; National banks; Persian Gulf War; Ratings & rankings; Regional banks; Statistical data; Stockholders; Trends
• ISSN: 0014-2433

For most Arab banks, 1991 was a better year than 1990. The Gulf war came to a rapid conclusion and the banks could assess the problems the conflict had caused and take steps to regain their former positions. However, many now believe that it is more appropriate to limit their horizons to regional opportunities. Saudi Arabia has provided more banks in the top 50 than any other country, with 12 institutions claiming a place. A further 2 made it into the top 100. Balance-sheet growth was high as deposits flowed back into the system. At the same time, loan opportunities abounded as public sector companies turned to banks for funding. In the past, this had often been provided by the government. Today, after all the costs of the war, official support has not been forthcoming, but the banks have been more than willing to plug the gap. This lending, in addition to investment in Saudi government development bonds, has provided good outlets for the traditionally liquid banks. In most cases, the new opportunities have led to record profits.