Saumitra Sehgal, Head of Financial Services in the Middle East at Roland Berger, a global strategy consultancy, said that the revenue of the UAE bank branches is the highest in the region at US$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 over three years, with the total decreasing from 4,067 in 2019 to 3,739 in 2022. The UAE showed the highest reduction with 157 branches, followed by Saudi Arabia, Bahrain, Qatar, and Kuwait. Omani banks increased branches by 8. Digitalization aims to enhance customer service and profitability while reducing operational costs.
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Sehgal predicted further branch reductions, particularly in the UAE, with potential savings exceeding $3 billion annually. The UAE leads in digital transformation, having already reduced branches by over 23%. Branch networks per 100,000 people vary, from 7.2 in the UAE to 12.8 in Kuwait.
The Emirati bank branch network topped the productivity or revenue in the retail sector, as the 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, and thus their role may increase in the future. However, they will not be the only form of banks as traditional banks that own branches will continue to exist and grow.
