100 top Arab banks special report: the momentum of globalisation and banking innovation is changing the landscape of the financial services industry in the energy-rich Middle East region, and posing new challenges and opportunities for banks and their clientele. Researched and written by economic analyst Moin Siddiqi.

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100 top Arab banks special report: the momentum of globalisation and banking innovation is changing the landscape of the financial services industry in the energy-rich Middle East region, and posing new challenges and opportunities for banks and their clientele. Researched and written by economic analyst Moin Siddiqi.

BANKING ON INCREASED MARKET LIQUIDITY

From the construction boom in the United Arab Emirates (led by dynamic Dubai) to upstream oil/gas expansion projects in Saudi Arabia and Qatar, the evidence of buoyant economic conditions in a region swamped by the flood of petrodollars is easy to observe and the positive spillover effects on the real economy are benefiting both corporate and retail operations.

Indeed, the Gulf region's six member countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE)--the powerhouses of Arab banking--are witnessing their strongest expansion in three decades, as respective governments boost capital spending, economies diversify, and legal/regulatory systems are reformed to promote foreign direct investment. The International Monetary Fund (IMF) noted that Gulf economies registered annual growth of almost 7% between 2003 and 2006, up from 3% a year during 1998-2002. Encouragingly, this robust growth has more banking implications, with large investments in manufacturing, real estate, tourism, telecom and transportation. Major players like the National Commercial Bank, National Bank of Kuwait, Abu Dhabi Commercial Bank, Emirates Bank Group, Qatar National Bank and Arab Banking Corp, among others, are benefiting from benign market conditions.

Adel El Laban, CEO of Bahrain-based Ahl...

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