UAE and other Gulf Cooperation Council (GCC) banks are showing strong interest in expanding into important regional markets such as Turkey, Egypt, and India due to improved economic conditions compared to their local markets, according to Fitch Ratings.

GCC banks are aggressively pursuing growth opportunities in Turkey, Egypt, and India, the global rating agency reports. The lenders are attracted by these markets’ robust growth prospects and are actively exploring acquisition targets to diversify their revenue streams and bolster profitability. 

“By deploying capital into high-growth markets, GCC banks may be able to compensate for weaker growth in their home markets,” Fitch analysts said.

Turkey and Egypt already host significant GCC bank assets, with a combined total of approximately $150 billion as of the first quarter of 2024. India is also gaining traction, particularly among UAE-based lenders, due to strong financial and trade ties between the two nations.

Despite persistent speculation, the UAE’s largest lender, First Abu Dhabi Bank (FAB), has publicly denied interest in acquiring a majority stake in India’s Yes Bank. The bank has also faced challenges pursuing a potential deal for a controlling interest in Turkey’s Yapi Kredi.

Other GCC banking giants have successfully expanded their regional footprint. Dubai Islamic Bank acquired a 20% stake in Turkey’s TOM Group last year, while Emirates NBD completed its acquisition of Denizbank in 2019.

Egypt’s banking sector presents additional opportunities for GCC banks, with the government’s privatization program potentially opening doors to minority stakes in three lenders.

Industry experts believe mergers and acquisitions will remain a strategic priority for financial institutions across the Middle East and Africa in the coming years.