GCC Commercial Banks Experience Asset Growth To $3.527 Trillion By End Of 2024

At the close of 2024, the commercial banks in the Gulf Cooperation Council (GCC) countries experienced a substantial growth in their total assets, with figures reaching approximately $3.5 trillion. This marked a notable 10% increase from the previous year, according to WAM report,

The escalation in total assets was mirrored by significant growth in other key financial indicators. For instance, the volume of deposits at these banks also saw an upward trajectory, reaching around $2.1 trillion by the end of 2024. This represents a 9.6% increase when compared to the figures at the end of 2023. The consistent rise in deposits not only illustrates a growing trust among depositors but also highlights the banks' ability to attract and retain capital.

Parallel to the increase in deposits, there was a sharp rise in the balance of loans dispensed by the GCC commercial banks, which stood at roughly $2.1 trillion by the year's end. This indicates a 9.9 percent enhancement from the year before.

A significant portion of these loans, amounting to about 80.7 percent, was directed towards the private sector, emphasizing the pivotal role of commercial banks in supporting private enterprise and economic development across the GCC countries.

Moreover, the health of the banking sector is further reflected in the declining ratio of non-performing loans to total loans over the period from 2020 to 2024. Despite variations across individual GCC countries, this trend signifies improving credit quality and risk management practices within the banking sector. The loan-to-deposit ratios also exhibited significant variance across the GCC, ranging from 125% to 66%, indicating diverse lending practices and liquidity levels among the countries.

Notably, the capital adequacy ratios of GCC banks remained robustly above the Basel III regulatory minimum, with figures between 32% and 17.8% in 2024. This adherence to international regulatory standards demonstrates the GCC banking sector's commitment to maintaining financial stability and safeguarding depositor interests. The Basel III framework sets a minimum capital adequacy ratio at 8 percent, and the GCC banks' performance well exceeds this benchmark, ensuring a buffer against potential financial shocks.

In addition to financial stability markers, the GCC commercial banks have also reported significant growth in net profits over the past four years, with earnings surpassing pre-pandemic levels. This surge in profitability not only reflects the effective management and operational efficiencies of these banks but also their ability to capitalize on emerging economic opportunities within the region.

Such growth underscores the robust financial health and the expanding influence of these banks within the region's economy. This surge in assets is a testament to the GCC banking sector's resilience and its capacity to thrive amidst global economic fluctuations.