Shareholder returns up 15% as Mideast banks rally

New report says Qatar and Kuwait led the region's banking sector recovery in 2010
Shareholder returns up 15% as Mideast banks rally
Middle East banks performed better than their global counterparts in 2010, according to a new report
By Andy Sambidge
Mon 07 Mar 2011 06:40 PM

The banking industry in the Middle East witnessed rising total shareholder return (TSR) while the global recovery slowed considerably in 2010, a report published on Monday said.

Overall, TSR in the Middle East increased to 15.2 percent in 2010 compared to 3.6 percent the previous year, the study by The Boston Consulting Group said.

The results were based on the analysis of approximately 550 global banks and financial service companies listed on international stock markets.

According to the report, Kuwait and Qatar led the Middle East pack in 2010.

Qatar was also least hit among GCC countries in 2008, while Kuwait came back from a negative TSR in 2009, the Boston report added.

Nearly all countries in the Middle East recorded a recovery in TSR since 2008 when the financial crisis hit the region.

Dr Reinhold Leichtfuss, partner & managing director in Boston's Dubai office, said: "This performance is a strong sign of the resilience of Middle Eastern banks and the region's financial sector more broadly speaking.

"Having said that, the rise in TSR did come after a year of stagnating TSR in 2009; hence, an increase could be expected."

Leichtfuss added: "Overall, universal banks fared much better than specialised finance companies that were hit quite severely, not only in the Middle East, but also in other countries."

He also said that challenges remained for Middle East banks resulting from revenue and margin pressures.

Globally, the industry's market capitalisation, following a 55 percent increase in 2009, grew by only 10 percent in 2010, while its total shareholder return fell from 47.1 percent to just 6 percent.

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