The ratio of banking deposits to GDP in the Gulf region is expected to drop to around 50 per cent levels as a result of increased investments in other asset classes.
Industry experts maintain that the rising loan to deposit ratio adds pressure to risk-weighted assets, according to Khaleej Times, and will thus impact the capital adequacy ratios of individual banks.
Despite rising fees and commissions such as broker and investment management fees, strong growth is also expected in non-interest income.
Double-digit growth in deposit base for the AGCC banking sector was predicted as well, on the back of rising oil revenues and subsequent increases in profitability and continued liquidity.
