DUBAI (AFP) - Gulf banks saw profits jump to 7.06 billion dollars in 2003 on the back of high oil prices and most expect to perform even better this year, the Middle East Economic Survey (MEES) reports in its Monday edition.
A survey of 67 banks in the oil-rich Gulf Cooperation Council (GCC) member states -- Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates -- showed profits last year rose by 19.7 percent from 5.9 billion dollars in 2002, the industry newsletter said.
Saudi Arabia's National Commercial Bank, the Gulf's largest bank in terms of equity and assets, also ranked highest based on profit, which reached 803 million dollars, partly as a result of its focus on bringing down non-performing loans, MEES said.
Bahrain-based Arab Banking Corporation "made an impressive turnaround in 2003 and posted 120 million dollars in profits after incurring 41 million dollars in losses in the previous year," the Cyprus-based newsletter said.
"This year most of the Gulf's banks are expecting profits for 2004 to eclipse those of 2003 as a result of the oil market buoyancy which has seen prices jump to over 40 dollars a barrel," MEES said.
Results reported so far this year bear out this assumption, it added.
MEES said Islamic banking had become a substantial growth area across the region.
"Gulf banks need to continue to diversify income and tap new markets, such as the Islamic sector, if they are to fend off increasing competition, not only from international banks, but each other," the newsletter said.