A large majority of bank CEOs in the MENA region are cautiously optimistic on growth for 2013, according to a new study.
The report released by HR consultancy Stormbridge International found that there are positive signs ahead but CEOs remain cautious about growth in 2013.
The study examined growth and performance metrics in 2012 as well as quantifying the overall confidence and sentiment for 2013 across the GCC and wider Middle East, including countries such as Lebanon, Morocco, Egypt, Iraq, Libya and Turkey.
Stormbridge’s report said confidence levels overall across the Middle East are increasing and are at their highest levels for the last four years but the region remains on guard for challenges that undoubtedly lie ahead.
Andre Nasr, CEO of Stormbridge International, said: “The findings from our study highlight a significant shift in the overall confidence for both international and regional banks across the Middle East.
“There is a strong sentiment amongst the CEO community that 2013 could provide opportunities for growth and in some cases, such as Qatar and Abu Dhabi, increased expansion into new markets.”
It said Qatar and Abu Dhabi are continuing to lead the growth and confidence among CEOs working there scored the highest in the survey.
Dubai also showed some positive signs over the last 12 months and confidence was up. However with the central bank recently cutting its growth forecast and the government not spending at the levels the region is used to, this has created a sense of caution for 2013, the survey said.
Infrastructure spending in the UAE and the increase in the manufacturing sector are seen as the key areas of growth opportunity, it added.
Nasr said: “The recent announcement by the Al Habtoor group to develop a $1.3bn resort is a key example of how Dubai is reigniting growth.”
The report showed that while confidence was returning to some countries in the Middle East there were also significant risks and challenges that lie ahead for others.
Several economies in the GCC are experiencing low levels of growth and the need for political and government intervention was identified as the key to igniting the economy.
A lack of government spending and increased regulation is also having a direct impact on growth in these countries, the report added.
With the continued political and security situation in some parts of the region, CEOs in these locations remain cautious of reaching significant levels of growth next year, the study showed.
Nasr said: “The current challenges in other parts of the Middle East can only serve to develop the more stable regions such as the UAE which is fast becoming the key hub for investment across the Middle East in the same way that the Swiss economy developed during the second World War.”
The challenges in the Eurozone and the American slowdown in growth have also served to provide caution to the MENA banking market.
The number of banks looking to expand internationally has slowed and this has left them fighting it out amongst their regional competitors for market share and this has created fierce competition in an already competitive marketplace.
The study also found that many CEOs are still keen to hire senior talent into their organisations but are having to be more selective and cautious.
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