Banking in the GCC: Structure, Performance and Transformation

“This book delivers a rigorous and insightful analysis of GCC banking, integrating competition, profitability, ESG, and financial development within a coherent empirical framework grounded in industrial organisation and institutional theory. It offers an original contribution, including the Israf-avoidance hypothesis, and provides timely insight into financial transformation in resource-based economies, making it valuable for scholars, policymakers, and practitioners.” (Zakaria Boulanouar, United Arab Emirates University, Al Ain, UAE)

“This book offers a rigorous and well-structured contribution to the study of GCC banking, integrating economic context, institutional arrangements, and banking performance within a coherent analytical framework. A notable strength is its treatment of sustainability, where ESG considerations are positioned as a core component of the sector’s ongoing transformation, underscoring their role in enhancing financial resilience and supporting long-term development in GCC banking systems.” (Faisal Alqahtani, Riyadh, Saudi Arabia)

“I wholeheartedly recommend this book. As a GCC-based researcher specialising in Islamic finance, ESG, and corporate governance, I find this work exceptional in its empirical rigour, regional specificity, and practical relevance. Its comprehensive coverage of profitability determinants, Islamic banking, and regulatory reforms makes it an essential resource for academics, practitioners, and educators alike.”

—Rihab Grassa, HCT, Dubai, UAE

Banking systems in the Gulf Cooperation Council (GCC) are operating at a critical juncture, shaped by global financial shocks, oil price volatility, pandemic disruption, and persistent geopolitical uncertainty. At the same time, ambitious national diversification strategies, evolving regulatory frameworks, rapid technological innovation, and growing prominence of ESG objectives are redefining the role of banks in resource‑dependent economies.

Over the past two decades, GCC banking sectors have undergone profound structural transformation, including the expansion of Islamic finance, technological modernisation, market consolidation, and strengthened prudential oversight. While macroeconomic stability has been supported by exchange‑rate regimes and fiscal buffers, structural vulnerabilities—such as concentration risks and sovereign‑bank linkages—continue to pose policy challenges.

This book provides a rigorous, policy‑relevant analysis of GCC banking performance using panel data methods. It examines how banks respond to regulatory reform, technological change, and competitive pressures, and assesses their contribution to financial stability and economic transformation. It offers valuable insights for policymakers, academics, and students concerned with the future of financial systems in the Gulf region.

Abderazak Bakhouche holds a PhD in Banking and Finance from the University of Bangor, Wales. He joined Higher Colleges of Technology (Dubai, UAE) in 2012 as an assistant professor of Economics and Finance . His primary research covers banking system issues, such as efficiency, competition, and stability.