S&P Global Ratings considered that the wave of bank mergers and acquisitions (M&A) in the Gulf Cooperation Council (GCC) region in the past 24 months is an indicator of the desire of banks with the same major shareholders to further strengthen franchises, enhance efficiency and boost pricing power. It pointed out that six out of the eight mergers that took place in the region since 2014 benefited from the presence of the same shareholders on both sides of the transaction, or among the acquiring and targeted banks. As such, it considered that these deals were closer to shareholders reorganizing their assets rather than to genuine mergers. But the agency indicated that the wave of banking sector consolidation in the region is almost over, given the reduced common ownership among the region's remaining major banks, which renders future deals more difficult. It considered that further banking sector consolidation could help improve the banks' performance and financial stability. Further, S&P anticipated that a new wave of acquisitions could emerge in case economic developments prompt shareholders to resort to M&A, and could involve deals across different GCC countries. But it considered that a new consolidation trend could take longer to materialize, as managers could find it difficult to convince boards of directors and shareholders of such moves, given that shareholders could have their assets diluted in case of M&A deals.  
Source: S&P Global Ratings