Arab 100 1998: Waiting for the after-shock

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Arab 100 1998: Waiting for the after-shock

Banks in the Middle East and North Africa generally performed well in 1997 despite hits in the second half from falling oil prices and Asian economic turmoil. Even where oil economies have successfully diversified, though, 1998 looks like being a tougher prospect. Banks in the region will therefore need to look harder at consolidation and cost-cutting. Andrew Beikos and Anthony Christofides report.

Top 100 Arab Banks: the Arab 100

Top 100 Arab Banks: Capital growth year-on-year

Top 100 Arab Banks: Asset growth year-on-year

Top 100 Arab Banks: Profit growth year-on-year

Top 100 Arab Banks: ROE growth

Top 100 Arab Banks: Methodology and Definitions


Banks in the Middle East and North Africa turned in yet another impressive performance in 1997. They benefited from propitious regional and international operating environments in the first half of last year. In the second half, though the Asian financial crisis overshadowed the business climate, the banks emerged generally unscathed. Overall, the top 100 Arab banks' combined net profits increased by a healthy 15.5% to $5.5 billion in 1997, generating returns on assets and equity of 1.3% and 14.4% respectively.

The banks will now have to contend with the continuing low oil prices and the full effects of the turmoil in the Asian financial markets. In the past, during recessions, the banks increasingly relied on borrowing from governments as these attempted to contain pressures on their widening budgets. As the Gulf economies endure lower rates of growth, the governments and banks are again likely to complement each others' financial requirements in order to soften the adverse effects of low oil prices.


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