GCC Banks Anticipated to Consolidate to Offset Revenue Pressure in the Wake of COVID-19: Moody’s

Moody’s Investors Service (Moody’s) has stated its expectation of an increase in merger and acquisition (M&A) activity across the Gulf Cooperation Council (GCC) region, citing challenging operating conditions resulting from the global economic slow-down as the main driver.

Banks are now faced with larger cost adjustments, amidst constrained growth opportunities caused by low oil prices and COVID-19, according to Moody’s. As banks seek to overcome revenue pressure, Moody’s expects GCC banks to aim for greater scale, in efforts to offset the impact of lower oil prices and the pandemic on profit margins.

Moody’s states that the drastic drop in revenue...