A combination of new oil wealth, financial-market liberalization, and changing trade and investment patterns has transformed the outlook for global banking institutions in the six states of the Gulf Cooperation Council (GCC).1
Retail and private banking have grabbed most of the headlines from the area over the past decade; however, corporate and investment banking represent around 40 percent of total GCC banking revenues ($11 billion) and seem set to grow by 10 to 20 percent a year over the next decade (Exhibit 1).2
Local opportunities, once scarce, now abound: the Arab Economic Forum, for example, estimates that some $700 billion worth of capital is likely to be mobilized to finance new infrastructure, oil and gas assets, petrochemicals, and the development of other vital sectors over the next ten years.
Beyond the promise of fast-growing revenue, current market trends are tilting the playing field in favor of global corporate and investment banks. A growing number of local corporations are going global and demanding that their financial advisers have an extensive geographic presence and internationally competitive skills. Local banks do not always have the experience necessary...