Are bank mergers in the GCC as profitable as they seem?

In the past two years, we have seen a number of bank mergers take place in the GCC. While the cost synergies of a bank merger can be tempting, the strategies to execute such a consolidation vary significantly and there is no "one size fits all" approach. A number of GCC banks observe a healthy capital position, requisite scale, and supportive shareholders also provide the necessary impetus for international expansions. However, not all international expansion strategies have yielded desired returns. In the past few years, one of three GCC banks incurred losses in their international operations. Only two out of every five banks are witnessing improvement in returns compared to the previous year.