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UAE banks lead regional revenue growth as digitalisation reduces branch costs across Gulf

Saumitra Sehgal, head of Middle East financial services at Roland Berger, a global strategy consultancy, said UAE bank branch revenue is the highest in the region at $18.6 million per branch for retail services. .

Sehgal highlighted the impact of digital transformation on Gulf banks, leading to a reduction of 328 branches in three years, with a total of 4,067 in 2019 to 3,739 in 2022. The United Arab Emirates showed the largest reduction with 157 branches, followed by Saudi Arabia and Bahrain. , Qatar and Kuwait. Omani banks increased by 8 branches. Digitalization aims to improve customer service and profitability while reducing operating costs.

Sehgal predicted further branch reductions, particularly in the United Arab Emirates, with potential savings exceeding $3 billion annually. The UAE is leading the digital transformation and has already reduced branches by more than 23%. Branch networks per 100,000 inhabitants vary, from 7.2 in the United Arab Emirates to 12.8 in Kuwait.

The Emirates bank branch network topped productivity or revenue in the retail sector as revenue per retail branch reached around $18.6 million after a 27 percent increase compared to its levels at the end of 2019.

Regarding fully digital banks that do not have physical branches, he indicated that their role is expanding with younger age groups, so their role may increase in the future. However, they will not be the only form of banks, as traditional banks with branches will continue to exist and grow.

News source: Emirates News Agency

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