Banks in the Gulf Cooperation Council countries plan to boost lending to small- and medium-sized companies while at the same time put more emphasis on youth and women to ramp up returns, a survey by Accenture - a global management consulting firm - said. The regional banks plan to cut their cost-to-income ratio to 35 percent from an average 36 percent to help increase return on equity to 20 percent by 2015 from 16 percent, the survey of 47 senior executives at banks in the region found. “The SMEs have traditionally been a small part of the business as the government sector” dominates the economy, Amr El Saadani, managing director for Accenture's financial services practice, said Monday. “Governments are now diversifying their economies and most banks have indicated they are interested in pushing this business.” Loans to small- and medium-sized companies make up 2 percent of overall lending in the GCC, compared with 27 percent in countries of the Organization of Economic Cooperation and Development, he said. More than half of the GCC population is less than 30 years old, while assets held by women is expected to surge to $800 billion by 2014 from $500 billion in 2009, he said. “Young people are extremely tech-savvy,” El Saadani said. “Women increasingly are also highly educated, increasingly employed and are becoming extremely demanding customers.” Addressing the small- and medium-enterprise segment as well as retail customers needs skilled banking staff, demand for which is outstripping supply in the region at a time when banks globally are cutting its workforce, El Saadani said. Banks are recovering from the global credit crisis, which slowed lending and led to an increase in loan defaults.
