Enticed by knock-down prices and cash-strapped European lenders eager to sell, Gulf banks are poised to snap up more assets in emerging markets like Egypt and Turkey as a way of locking in long-term growth outside their much smaller domestic markets.
In the past year, lenders from Qatar and the UAE have purchased banks in Egypt and Turkey, preferring acquisitions to organic growth in markets that until recently were the playground of mostly Western banks. The catalysts for this trend-European banks retrenching and deep pocketed Gulf banks with international ambitions-are expected to remain intact, at least in the near term.
“The leading banks in the GCC will be able to further expand into larger markets since most of them are still earning decent profits and are operating at lower cost-income ratios than banks in all other regions in the world,” said Reinhold Leichtfuss, senior partner and managing director at Boston Consulting Group in Dubai.
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