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Bahrain is taking important steps to boost the participation of small and medium enterprises (SMEs) in government tenders and auctions. The government’s new initiatives aim to create more opportunities for local businesses to engage in public sector projects, fostering economic growth and empowering entrepreneurs across the country.

The Minister of Electricity and Water Affairs, Yasser Humaidan, announced that measures are being implemented to allow SMEs to have better visibility into government tenders and auctions. This will give them the chance to assess whether they want to bid on these projects. A key development in this initiative is the allocation of 10% of government tenders specifically for SMEs, following a Cabinet decision.

In addition to this, a number of tenders will now be limited exclusively to SMEs that are registered with Bahrain’s Ministry of Industry and Commerce. This change is designed to make it easier for smaller companies to participate, ensuring they have a fair chance to compete in public sector projects.

To further assist SMEs, the government is establishing a dedicated unit within the Tender Board that will focus on supporting these businesses. This unit will oversee initiatives aimed at providing the guidance, training, and resources SMEs need to successfully navigate the tendering process. In partnership with a local bank, the board has also arranged for financial guarantees to help SMEs meet the requirements for bidding on government tenders.

One unique aspect of these initiatives is the inclusion of productive families in government tenders. Families with SMEs that are officially recognized by the Ministry of Industry and Commerce can now participate in tenders, adding an extra layer of inclusivity to the process.

To help businesses understand how government tenders work, workshops will be organized. These sessions will cover everything from the procedures involved to the rights and responsibilities of those bidding on projects, ensuring SMEs are fully informed before they take part in the tendering process.

In parallel with these initiatives, Youth Affairs Minister Rawan Tawfiqi announced that youth empowerment centers across Bahrain are receiving financial support to enhance their operations. The Ministry allocates BD133,000 annually to support these centers, ensuring that they have the resources to offer high-quality programs and activities for the country’s youth.

Meanwhile, housing continues to be a key priority, with Housing and Urban Planning Minister Amna Al Romaihi providing updates on housing solutions for Bahraini families on the waiting list. Several options are being offered, including residential plots and temporary apartments, as part of the government’s ongoing efforts to address long-standing housing challenges.

These measures reflect Bahrain’s dedication to promoting a diverse and inclusive economy, ensuring that SMEs, youth, and local families are supported in their growth and development. By creating a more accessible and supportive environment for smaller businesses, the government is helping lay the foundation for long-term economic success.

The GCC economies will more than double their growth rate from 1.9% in 2024 to 4% in 2025, according to the latest ICAEW Economic Insight report prepared by Oxford Economics. This acceleration comes despite the extension of OPEC+ oil production cuts and positions the GCC to significantly outperform global GDP growth, which is projected to increase modestly from 2.7% in 2024 to 2.8% in 2025.

Strong Energy and Non-Energy Sector Performance

The GCC’s energy sector is set for a strong rebound in 2025, with growth of 4.2% following the gradual unwinding of oil production cuts. Meanwhile, the non-energy sectors will maintain their robust performance, with consistent expansion near 4% in both 2024 and 2025. Regional PMIs remain firmly in expansionary territory, with Saudi Arabia’s PMI reaching a six-month high of 56.9, demonstrating strong business confidence and domestic activity.

UAE: Record Investment and Diversification Success

The UAE economy is set to grow from 3.7% in 2024 to 4.5% in 2025, though non-energy sector growth is expected to moderate slightly from 4.5% to 4.3% due to capacity constraints in key sectors. The country’s success in attracting investment is evident in its $16bn of greenfield foreign direct investments, maintaining its global leadership position in FDI relative to GDP. Tourism continues to drive growth, with Dubai visitor arrivals increasing 6.3% year-on-year in the first nine months of 2024.

Saudi Arabia: Strong Recovery and Transformation

Saudi Arabia’s economic growth economy is projected to accelerate from 1.4% growth in 2024 to 4.4% in 2025, supported by robust non-energy sector expansion of 5.8%. The Kingdom has shown significant recovery, with GDP growing 2.8% year-on-year in Q3 2024, following four consecutive quarters of decline. The tourism sector’s ambitious $800bn investment program over the next 10 years, alongside major events like Expo 2030 and FIFA World Cup 2034, underpins the country’s diversification efforts.

Fiscal Position and Monetary Policy

Despite challenges posed by lower oil revenues, the GCC continues to maintain an overall budget surplus, with Qatar and the UAE emerging as leaders in fiscal strength. Saudi Arabia, while anticipating budget deficits, benefits from low government debt levels, ensuring the flexibility needed to pursue strategic investments. The UAE’s projected 4.1% budget surplus in 2025 demonstrates its strong fiscal management.

GCC inflation is expected to rise moderately from 1.8% in 2024 to 2.3% in 2025, remaining well-controlled across the region. Following the US Federal Reserve’s 75 basis points rate cuts in September and November this year, GCC central banks have mirrored these adjustments, with further reductions likely to boost real estate and private-sector investment.

Hanadi Khalife, Head of Middle East, ICAEW, said: “The business landscape across the GCC continues to evolve and mature, creating new opportunities for growth and innovation. As professional services advisors, we see firsthand how businesses are adapting to change and investing in their future.

“The role of chartered accountants remains crucial in supporting organizations as they navigate this dynamic environment and pursue sustainable business practices.”

Scott Livermore, ICAEW Economic Advisor, and Chief Economist and Managing Director, Oxford Economics Middle East, said: “The GCC’s projected 4% growth in 2025 highlights the success of the region’s diversification efforts amid global challenges.

“As the region continues to expand its tourism, real estate and financial sectors; managing capacity constraints in these high-growth sectors, as well as navigating global uncertainties, will be key to sustaining momentum and long-term economic stability.”

In a significant step toward fostering financial innovation, Qatar Central Bank (QCB) has introduced a regulatory framework for digital banks, aligning with the country’s third financial sector strategy and financial technology (fintech) objectives. This initiative underscores QCB’s commitment to regulating and advancing the financial sector while propelling Qatar’s digital transformation.

The framework highlights the growing importance of digital banks in enhancing financial inclusion by offering innovative and efficient services tailored to the needs of individuals and businesses. Digital banks provide 24/7 integrated solutions through internet platforms and mobile applications, enabling seamless financial transactions from anywhere at any time.

QCB emphasized that the regulatory framework is central to its mission of driving technological advancements in the financial sector. By embracing cutting-edge digital innovations, the framework supports Qatar’s vision of a robust digital economy, paving the way for sustainable development and improved financial services.

Advantages of Digital Banking

Digital banks leverage advanced technologies to ensure speed, security, and cost-efficiency in financial transactions. The new regulations aim to maximize these benefits, enhancing customer experiences while reducing operational expenses. This efficiency translates into more affordable and accessible banking services, further advancing the nation’s financial inclusion goals.

QCB reaffirmed its dedication to fostering the growth of the fintech sector by establishing a supportive infrastructure and legislative environment. This approach empowers companies in the sector to deliver innovative solutions that enhance operational efficiency and drive innovation in financial services.

The regulatory framework also aligns with Qatar National Vision 2030, which emphasizes sustainable development and technological excellence across sectors.

For more information on the regulatory framework, QCB has made the details accessible on its official website, inviting stakeholders to explore the new guidelines that will shape the future of banking in Qatar.

This initiative marks a significant step toward a technologically advanced financial landscape, ensuring that Qatar remains at the forefront of digital transformation in the region.

The Federal Tax Authority (FTA) has called on businesses subject to Corporate Tax to file their returns and pay dues for respective tax periods within the stipulated legal timeframes. This call reflects the FTA’s commitment to facilitating voluntary tax compliance across sectors with ease and efficiency.

In September, the FTA issued Decision (7) of 2024, extending the deadline to file tax returns and settle Corporate Tax payable for certain periods. Businesses with tax periods ending on or before February 29, 2024—including December 2023, January 2024, and February 2024—now have until December 31, 2024, to fulfill these obligations. The extension aims to provide flexibility and prevent administrative penalties for non-compliance during these periods.

The FTA highlighted that aside from the extended periods, businesses must adhere to the usual requirement of filing returns and paying Corporate Tax within nine months of the end of their tax period. Failure to comply within these timelines could result in administrative penalties, stressing the importance of timely adherence to legal mandates.

Khalid Ali Al Bustani, Director-General of the FTA, underscored the significance of filing tax returns promptly for each tax period. He reminded businesses that periodic compliance under the Corporate Tax Law ensures transparency and accountability.

Al Bustani also noted the FTA’s proactive efforts to engage with taxable entities, gathering feedback and resolving potential challenges. This collaborative approach is aimed at ensuring that businesses can implement tax legislation effectively without disrupting their operations.

The FTA continues to encourage all businesses to review their obligations and utilize the extensions provided where applicable. Timely compliance remains crucial to fostering a robust and trustworthy tax system while supporting economic activity across sectors.

A recent Kaspersky study reveals that businesses are increasingly worried about the growing use of artificial intelligence (AI) in cyberattacks. According to the findings in Saudi Arabia, 82% of surveyed companies reported a rise in cyber incidents over the past year, with almost half of respondents (62%) noting that many of these attacks were likely AI-driven. The study underscores the reality that AI, which has revolutionized numerous industries, is now also empowering cybercriminals, adding an additional layer of complexity to the threats businesses face.

In its latest study titled “Cyber defense & AI: Are you ready to protect your organization?” Kaspersky gathered the opinions of IT Security and Information Security professionals working for SMEs and Enterprise-level companies regarding new challenges in protecting their organizations against cyberattacks involving the use of AI.

Leveraging AI by cybercriminals is a serious concern for 76% of respondents. The pressure of this challenge is pushing companies to reassess their cybersecurity strategies and look for solutions that are both proactive and comprehensive. To effectively tackle AI-amplified threats, businesses consider regular training to build internal expertise (98%), highly qualified personnel (96%), and relevant external cybersecurity expertise (96%) as the most important factors for protecting their organizations. They also recognize the importance of having enough staff in their IT teams (98%) and using third-party security solutions (98%).

Despite rising awareness, the study reveals a concerning gap in readiness among many companies. Over half of the organizations surveyed lack crucial resources needed to address these sophisticated threats – 64% don’t have the relevant external cybersecurity expertise at their disposal, 58% report that their IT teams are not large enough, 49% lack highly qualified staff, and 51% fall short in regular training efforts. Additionally, 44% of respondents do not think they have adequate security solutions in place, exposing them to potential vulnerabilities. While most respondents claim to know how to address this lack of resources, the fact remains that they aren’t in place.

“The cybersecurity landscape today mirrors past challenges, with businesses questioning if current solutions suffice. Ransomware, once a primary threat, now demonstrates a dangerous surge, and business decision-makers start questioning the causes of this resurgence. The recent hype around AI offers an easy, if not entirely correct explanation. In reality, while using AI to create convincing phishing messages or more effective reconnaissance may be of some help, the root causes are most often more straightforward: cybercriminals have become more organized, better at collaborating, developing innovative attack strategies, and lowering the barriers for less skilled and resourceful attackers. So, while it’s useful to keep an eye on AI progress that can enable both attackers and defenders with new options, there are solid strategies companies can – and should – implement immediately. Companies should prioritize securing critical IT infrastructure with robust, multi-layered solutions that offer a unified security context. An XDR ecosystem, combined with skilled expertise – whether in-house or through a managed service – can greatly enhance defenses. Additionally, ongoing employee training, including cybersecurity basics and safe AI practices, adds another critical layer of protection for the organization,” – says Oleg Gorobets, corporate infrastructure protection expert at Kaspersky.

To protect the business against AI-enabled cyberthreats, Kaspersky recommends starting with the following:

• Ensure that every level and element of your IT network is protected with solid, multi-layered protective solutions. Kaspersky solutions, starting with Kaspersky Next product line, all have fairly advanced AI technologies under the hood designed to automatically block emerging threats.
• Make sure that these security solutions offer inter-compatibility to provide your team with a unified view of your corporate security. This is where XDR comes into play – implementing an organic XDR ecosystem from a single vendor is always the superior choice; Kaspersky Next XDR Expert is a natural option here.
• By leveraging the best cybersecurity expertise, organizations can detect and contain complex, focused attacks which increase in sophistication as AI tools help attackers to launch more precise targeted attacks. If you lack this expertise in-house, Kaspersky Managed Detection & Response together with online and live Kaspersky Cybersecurity Training are a strong option that bolster your in-house skills.
• Turn your office workforce into an extra layer of defense with the Kaspersky Automated Security Awareness Platform, which instils cybersafe behavior. It includes specialized sections dedicated to AI-assisted threats and safe use of AI tools, helping to avoid the risks associated with the growing proliferation of AI tools.

Zain Group, a leading telecommunications operator operating across the Middle East and Africa has entered a definitive agreement to acquire IHS Holding Limited’s (NYSE: IHS) 70% interest in IHS Kuwait Limited, an independent licensed Tower Company that owns 1,675 sites and manages an additional approximate 700 sites in Kuwait.

Under the terms of the transaction, Zain has agreed to increase its 30% ownership of IHS Kuwait Limited to 100%, at an equity value for the remaining 70% stake of US$134 million. IHS Kuwait Limited will continue to provide independent tower infrastructure services within the Kuwait market.

The transaction is subject to customary closing conditions, including government and regulatory approvals.

Commenting on the transaction, Bader Al Kharafi, Zain Vice-Chairman and Group CEO said, “This agreement will enhance Zain’s Digital Infrastructure regional expansion strategy in creating capital efficiencies and driving shareholder value. It will also complement our ground-breaking deal with Ooredoo to acquire and merge approximately 30,000 towers. The aim of our sustainable and independent operating model is to provide passive infrastructure as a service, supporting the reduction of MENA’s carbon footprint and empowering the region’s digital future.”

Saudi Arabia’s non-oil sector saw remarkable growth in November, with activity expanding at the fastest rate since July 2023. This surge was fueled by robust demand across multiple industries. The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI) climbed to 59.0 in November from 56.9 in October, marking the fourth consecutive month of growth and signaling a strong economic momentum.

A key driver of this growth was the new orders subindex, which increased to 63.4 from 62.5 in October. Respondents highlighted an expansion in customer bases and rising investment spending, indicating a broad-based demand recovery. The output subindex also saw an uptick, rising to 63.8 from 60.2 in October, as businesses ramped up production to meet increased demand.

Firms are also experiencing accelerated hiring, with job creation picking up speed compared to the previous month. This positive trend reflects the increasing independence of Saudi Arabia’s non-oil sectors, with their ability to drive economic activity unimpeded by fluctuations in oil prices.

Naif Al-Ghaith, Riyad Bank’s chief economist, commented that this robust expansion underscores the growing capacity of non-oil industries to contribute significantly to Saudi Arabia’s overall economic activity, helping to mitigate the effects of oil price volatility.

Despite a forecasted fiscal deficit of $27 billion for 2025 as the kingdom invests heavily in Vision 2030 initiatives, businesses remain generally optimistic about the long-term outlook. While confidence about the 12-month outlook showed a slight dip from October, it remains aligned with the broader trend for 2024, signaling ongoing potential for non-oil growth in the kingdom.

ESET, a global leader in cybersecurity solutions, has announced a key strategic integration with Filigran, a leading provider of open-source threat intelligence management, to integrate ESET Threat Intelligence with its OpenCTI solution.

To attain a strong and proactive security posture, organizations need to aggregate and correlate vast amounts of data from diverse sources. However, telemetry and threat data from one vendor isn’t enough to combat multiple sophisticated threats, and since there is an ongoing shortage of talent and a general lack of internal cybersecurity resources, businesses increasingly purchase services instead of, or on top of, cybersecurity products. As such, there is a demand for seamless integrations, because they simplify workflows, reduce manual effort, and enhance efficiency.

Staying on top of security requires you to be one step ahead by working to achieve enhanced situational awareness, an understanding of the threat landscape including TTPs, and to build strong early warning capabilities, which ESET’s highly curated and actionable threat intelligence helps provide.

This is why ESET is continuing its integration journey, now with Filigran’s OpenCTI, enabling the consolidation of its well-regarded threat intelligence data from ESET directly into OpenCTI. This enhances the analytical capabilities of cybersecurity teams by providing a single, comprehensive, and holistic view of potential threats, centralizing threat data.

“At ESET, integrations are crucial for our success going forward. ESET Threat Intelligence’s diverse telemetry and rich JSON/STIX 2.1 data feeds including: malicious files, botnets, APT IoCs, domains, URLs, and IPs (+ nine new sub-filters in Q4 2024), are seamlessly integrated into OpenCTI, complete with corresponding actionable research insights. Existing users of Filigran will be able to unlock a significant boost to the maturity of their organizational security via their threat-hunting and incident-response capabilities,” said Roman Kovac, Chief Research Officer at ESET.

“With hundreds or even thousands of malicious actors adapting rapidly, timely exploitation of threat intelligence feeds is a challenge. By combining ESET’s high-quality data with OpenCTI’s advanced processing, visualization, and automation capabilities, we make this possible.” – Jean-Philippe Salles, VP Product at Filigran.

The main benefits of the integration are:

• Enhanced insights: ESET’s data feeds offer unique, high-value telemetry derived from its extensive endpoint protection network. This data includes real-time telemetry and detailed threat intelligence that are crucial for accurate threat detection and mitigation.
• Enhanced Analysis: ESET’s data feeds provide advanced context and early-stage detection capabilities, helping analysts to identify and respond to threats more efficiently.
• Interoperability: This partnership enhances interoperability between ESET’s Threat Intelligence and OpenCTI’s analytical tools. ESET’s utilization of TAXII 2.1 and STIX 2.1 standards allows for seamless data exchange and improved threat response workflows.
• Actionable intelligence: ESET’s highly curated data feeds provide actionable intelligence that can be immediately utilized within OpenCTI, improving the overall efficiency and effectiveness of threat detection and response efforts.

Moreover, the unique value of this integration lies in the fact that it overcomes specific challenges related to incident response, as by leveraging ESET Threat Intelligence, users of OpenCTI will greatly enhance their mean time to detect (MTTD) and reduce their mean time to respond (MTTR), all thanks to ETI’s highly curated up-to-date feeds allowing organizations to stay one step ahead of the latest threats.

The Central Bank of Egypt (CBE) has reported a positive shift in the country’s banking system, with net foreign assets showing a surplus of $9.2 billion (EGP 450.861 billion) in October 2024. While this marks a slight decrease from the $10.3 billion (EGP 498.6 billion) recorded in September, it still highlights a significant achievement compared to the previous deficit period. Notably, in May 2024, the banking system’s net foreign assets had first reached a surplus of EGP 676.4 billion, reversing a deficit of EGP 174.385 billion in April.

The banking system’s total foreign assets in October amounted to EGP 3.584 trillion, up slightly from EGP 3.562 trillion in September. At the same time, liabilities rose to EGP 3.133 trillion, compared to EGP 3.064 trillion the previous month.

In terms of local liquidity, the CBE reported a significant increase in the money supply, with the volume of local liquidity in the banking sector reaching EGP 11.247 trillion in September 2024, up from EGP 8.877 trillion in December 2023. The money supply itself grew to EGP 2.778 trillion, up from EGP 2.370 trillion, while cash in circulation outside the banking system also increased, rising from EGP 1.068 trillion to EGP 1.163 trillion.

The non-governmental deposits in local currency grew to EGP 7.307 trillion in October, compared to EGP 6.247 trillion in December 2023. This growth is reflected across different sectors, with demand deposits in local currency reaching EGP 1.614 trillion, compared to EGP 1.301 trillion in December 2023. Public sector demand deposits amounted to EGP 107.434 billion, while the private sector had EGP 907.222 billion, and the household sector contributed EGP 600.035 billion.

In terms of time deposits and savings certificates, the total amount in local currency reached EGP 5.693 trillion in October, up from EGP 4.946 trillion. The public sector held EGP 65.393 billion, while the private sector held EGP 325.964 billion, and the household sector had EGP 5.301 trillion in these forms of deposit.

Foreign currency deposits also showed considerable growth, with total non-governmental deposits in foreign currencies rising to EGP 2.776 trillion in October, up from EGP 1.561 trillion in December 2023. Demand deposits in foreign currencies reached EGP 684.987 billion, while time deposits and savings certificates amounted to EGP 2.091 trillion. The public business sector’s share of foreign currency deposits included EGP 32.478 billion in demand deposits and EGP 142.847 billion in time deposits, while the private business sector held EGP 467.198 billion in demand deposits and EGP 465.631 billion in time deposits. Households contributed EGP 185.434 billion in demand deposits and EGP 1.482 trillion in time deposits.

Enhancing its prominent leadership as the most-trusted Islamic banking partner, Bank Nizwa, the leading Islamic bank in the Sultanate of Oman, was recently titled ‘Strongest Islamic Retail Bank in Oman 2024’ at the Islamic Retail Banking Awards (IRBA). This prestigious accolade highlights Bank Nizwa’s commitment to providing innovative Sharia-compliant banking solutions, underpinned by a profound understanding of its customers’ evolving needs and a steadfast dedication to service excellence. The award was graciously accepted by Mr. Talib Al Yarubi, Head of Branches of Bank Nizwa, on behalf of the bank.

SICO BSC (c), a leading regional asset manager, broker, and investment bank with a direct presence in Bahrain, Saudi Arabia, and the UAE, published its fourth annual investor return assessment survey, offering an inside look into the economic and return requirements of investors across the GCC.

This year’s survey, conducted in September, gathered insights from a diverse group of 209 respondents across the GCC investment ecosystem, including C-suite executives, fund managers, business owners, and institutional investors. Respondents provided feedback on their expected returns across asset classes, including listed equities, government bonds, real estate, private equity, and cash deposits, while also sharing their economic outlook and views on which asset class offers the best risk-adjusted returns over the next 12 months.

SICO’s Group CEO, Najla Al-Shirawi, commented on the report publication, saying, “As we navigate an era of high interest rates, global inflationary pressures, and geopolitical uncertainty, the region remains resilient, with Saudi Arabia and the UAE leading the charge in economic transformation. This report reflects the collective insights of the GCC’s investment community and serves as a roadmap for identifying opportunities and aligning solutions with ever-changing market needs. As we move into 2025, these findings will be an essential resource for addressing market challenges, and we remain committed to supporting our clients with insights and solutions that align with their goals.”

Despite navigating a challenging global environment, investor sentiment remains robust, and market participants are optimistic about Saudi Arabia, the UAE, and Qatar, with 83%, 79%, and 52% of respondents, respectively, expressing positive sentiment. The outlook for Kuwait and Bahrain is largely neutral, while Oman has seen an increase in optimism this year.

Based on respondent expectations, the return requirements for listed equities, the most preferred asset class in terms of risk adjusted returns over the next 12 months, remained consistent at 9-12% for 2025 across the GCC, mirroring last year’s range.

Within income-generating real estate, required returns across the GCC were stable at 7-10%, despite challenges such as market volatility and tenant risks, economic growth driven by increased government spending and infrastructure development in markets like the UAE and Saudi Arabia is increasing demand. With rising tourism, population growth, and a significant trajectory of private and public sector projects, the outlook for real estate remains positive.

Private equity retained its position as the asset class requiring the highest returns, exceeding 16% in Saudi Arabia and Oman, between 13-15% in the UAE, Kuwait, and Bahrain, and 10-12% in Qatar. In terms of 10-year USD government bonds, required returns ranged from 5% in Saudi Arabia, the UAE, Qatar, and Kuwait to 6% in Bahrain and Oman, consistent with investor expectations for relatively lower-risk fixed-income instruments.

Cash deposit return requirements for Saudi Arabia, the UAE, Oman and Bahrain were similar to last year at 5–6%. Meanwhile, Qatar saw slightly lower return requirements this year at 3–4%, compared to the previous year’s range of 5-6%. Respondents required a wider range of returns in Kuwait at 3–6%, compared with the 5-6% requirement last year. These results indicate relative stability in cash deposit returns across most GCC markets, with slight adjustments reflecting liquidity conditions and regional dynamics.

In terms of issues impacting the investment landscape, the report highlights that while geopolitical tensions were the top concern for investors, the GCC economies have demonstrated resilience. Supported by diversification efforts, government spending, and the growth of non-oil sectors, the investment landscape remains stable. The report further notes that global inflation, while a concern, is projected to decline, signaling a potential easing of economic pressures.

Qatar Financial Centre Authority (QFCA), the legal and tax arm of the Qatar Financial Centre (QFC), a leading onshore financial and business center in the region, signed a Memorandum of Understanding (MoU) with Casablanca Finance City Authority (CFCA), the managing entity of Casablanca Finance City (CFC), the leading business and financial hub in Africa. The strategic partnership establishes a collaborative framework between the two entities, both members of the World Alliance of International Financial Centres (WAIFC), to bolster their roles as regional financial hubs and promote the economic development and business-friendly environments in both Qatar and Morocco.

The MoU outlines several core objectives, including fostering development and sharing best practices in financial technology, private banking and sports, to drive innovation and diversification; attracting more financial institutions, multinational corporations, and professional services providers to both financial centers; and exchanging information on innovation trends, products, services, and relevant legislation in each jurisdiction.

Additionally, cross-border business engagement will be enhanced through regular delegations, further strengthening ties between the two financial communities. The MoU also articulates joint initiatives in financial literacy and professional trainings designed to cultivate a talent pool ready for the evolving financial sector.

Yousuf Mohamed Al-Jaida, Chief Executive Officer, QFC, underscored the significance of the partnership: “This partnership with Casablanca Finance City Authority strengthens our efforts to drive the growth and development of the financial sector while building an interconnected, innovative, and future-ready framework across the region. Joining forces with CFCA enhances our ability to attract global investment and creates opportunities for shared growth and knowledge exchange, fostering a stronger financial landscape in both Qatar and Morocco.”

Said Ibrahimi, Chief Executive Officer, CFC, echoed Al-Jaida’s sentiments: “This MoU is a milestone for both Casablanca Finance City and Qatar Financial Centre, forging a vital link between Africa and the Middle East. Together, we’re not just collaborating; we’re creating a bridge that empowers businesses and drives transformative growth across our regions.”

This MoU marks a significant step in the collaborative relationship between Qatar and Morocco, highlighting their shared commitment to establishing a new standard for regional cooperation and building a resilient, innovative, and globally competitive financial ecosystem.

Alvarez & Marsal (A&M) has released its latest KSA Banking Pulse for Q3 2024, highlighting a continued positive performance among the ten largest Saudi banks. The report reveals that while the sector faces some challenges, key growth drivers and improved operational efficiency have contributed to a solid quarter.

The banks experienced a notable 3.7% quarter-on-quarter (QoQ) increase in Loans & Advances (L&A), primarily driven by a strong 4.4% growth in corporate and wholesale banking. This reflects the continued demand for financing from the business sector, contributing to the overall performance. Deposits also saw a healthy rise, growing by 1.4% QoQ, with time deposits marking the highest increase at 4.2% QoQ.

The loans-to-deposit ratio (LDR) increased by 2.3 percentage points, reaching 100.1% in Q3 2024, as loan growth outpaced deposit growth.

Operating income rose by 6.0% QoQ to SAR 36.9 billion in Q3 2024. This was largely driven by a 15.2% increase in non-interest income, which reached SAR 8.6 billion. Non-interest income growth was fueled by a 32.7% rise in other operating income, helping offset the slight 3.5% increase in net interest income (NII), which reached SAR 28.3 billion.

The aggregate net interest margin (NIM) remained stable at 2.95% in Q3, with the yield on credit rising by 18 basis points to 8.6%, while the cost of funds increased by 14 basis points to 3.5%.

The cost-to-income (C/I) ratio improved by 31 basis points, reaching 31.0% in Q3 2024, reflecting the higher growth in operating income compared to operating expenses, which rose by 4.9% QoQ.

On the downside, the cost of risk increased slightly, rising by 7 basis points QoQ to 0.35%. This was due to a worsening in the cost of risk at all the top four banks.

Net profit for the quarter rose by 5.3% QoQ to SAR 20.5 billion, driven by the strong growth in non-interest income. This growth in profitability led to an increase in the return on equity (RoE), which expanded to 17.4%, up by 0.6 percentage points QoQ. Meanwhile, the return on assets (RoA) remained consistent at 2.0%.

Mr. Asad Ahmed, Managing Director of A&M’s Financial Services division, commented on the sector’s performance: “The continued positive performance in Q3 2024 reflects a balance of growth and improved cost efficiencies among Saudi Banks. Profitability has increased primarily due to an increase in non-interest income amid a moderate rise in impairment charges.

“As the Saudi Central Bank (SAMA) maintains interest rates in line with the US Fed, potential further rate cut in the coming quarters are likely to affect interest margins.; Focus on non-interest income and improved cost efficiencies, will remain central going forward.”

A&M’s KSA Banking Pulse examines data from the 10 largest listed banks in Saudi Arabia, comparing Q3 2024 results with those from Q2 2024. The report uses independent market data and evaluates key performance metrics across various areas, including size, liquidity, income, operating efficiency, risk, profitability, and capital.

The ten banks analyzed in the report are Saudi National Bank (SNB), Al Rajhi Bank, Riyad Bank (RIBL), Saudi British Bank (SABB), Banque Saudi Fransi (BSF), Arab National Bank (ANB), Alinma Bank, Bank Albilad (BALB), Saudi Investment Bank (SIB), and Bank Aljazira (BJAZ).

Artificial intelligence is poised to transform both work and everyday life. But it has a dark underside: AI computer centres consume enormous amounts of electricity and water, to power their processing chips and cool the heat they emit.

Annual U.S. electricity use by data centres of all types will rise from 3% to 4% of the nation’s total today to between 11% and 12% in 2030, with AI being the main driver, according to projections from consulting firm McKinsey.

Meantime, AI’s demand for water globally in 2027 could account for more than the total annual amount withdrawn for use in Denmark or half of that in the U.K., according to researchers at the University of California, Riverside and University of Texas at Arlington.

All of that heavy use is causing logistical and public-image problems for the industry. Some utilities struggle to supply the needs of AI providers, and communities push back, fearing the added use will boost power prices and deplete water supplies.

The biggest AI providers, including Amazon , Alphabet Inc.’s Google, Meta and Microsoft , say they are working to be both carbon-neutral and replenish more water than they use—even as they continue to build massive data centres.

“It will be harder to build data centres, especially where energy already is at a premium or water might be scarce,” says Ed Anderson, research vice president at technology advisory firm Gartner. But, he adds, “the economic opportunity is rich enough that the providers will find a way.”

Below are some of the steps tech companies and researchers are hoping will reduce AI’s appetite for power and water.

Making chips more efficient

One way of addressing power consumption is to make chips less power hungry. Nvidia , the largest maker of AI processors, says its newest ones, called Blackwell, will be about 25 times as energy efficient as its previous high-end version. Meanwhile, Amazon, Google, Meta and Microsoft are designing their own processing chips, in part to cut costs but also to make them use less power.

“Each generation has been significantly more efficient than the prior one,” says Google’s Partha Ranganathan , a vice president and engineering fellow, speaking of his company’s processing units.

Different sources for water

Equipment used to cool data centres creates another issue: where to get the vast amount of water these systems consume. Google says its data centers globally used about 6.1 billion gallons of water in 2023, equivalent to the water used to irrigate and maintain 40 golf courses in the Southwest each year.

OpenAI’s GPT-3 model, meantime, consumes the equivalent of a 16.9-ounce bottle of water for every 10 to 50 responses it provides to users’ queries, according to the researchers at UC Riverside and UT Arlington. OpenAI declined to comment on the finding.

Data-centre water typically comes from municipal water systems. But in an era of water shortages, diverting drinking water for an industrial use has created tensions in some locales. That has sent AI companies searching for other sources, including rainwater, treated wastewater or water left over from factory processes.

Amazon, for example, uses recycled wastewater for cooling at its Santa Clara, Calif., data centers. The water comes from the city’s sewage-treatment system after it undergoes a three-step process that removes 99% of impurities.

Smarter training for AI

Some researchers have experimented with carefully controlling what kind and how much information an AI model takes in during training. Usually, training a so-called large language model AI, such as OpenAI’s ChatGPT and Microsoft’s Copilot, involves ingesting hundreds of billions of words from the internet and elsewhere, then learning the relationships among them.

And that is energy and water intensive. Training an AI model called BLOOM over a 3½-month period consumed enough electricity to power the average U.S. home for 41 years, according to a Stanford University report.

As for water, training one of Google’s AI models, known as LaMDA, used about two million liters of it, both to produce the electricity used and keep the computers cool—enough to fill about 5,000 bathtubs, according to Shaolei Ren , a professor of electrical and computer engineering at the University of California, Riverside. Google declined to comment on the research, but said it is “committed to climate-conscious cooling of our data centres.”

One possible solution is to have AIs remove redundancy and low-quality data, instead of just vacuuming up the whole internet. The goal is a much smaller set of data that the AI system can more easily sift through when a user asks it a question.

This can lower electricity consumption, according to some researchers.

AI systems that limit the information they take in are also less likely to “hallucinate”—give false or misleading answers—and can respond in ways that are more on-point because of the higher quality of the data they contain, experts say. Microsoft found that one of its pared-down AIs exceeded that of vastly larger ones in measurements of  common sense and logical reasoning .

Dialling down the juice

Researchers at several universities have found that capping the amount of electricity used by AI computers has only a minor effect on the outcome, such as slightly more processing time.

Experts at the Massachusetts Institute of Technology and Northeastern University say that reducing the power to one of Meta’s AIs by 22% to 24% slowed the speed at which the AI responded to a query by only 5% to 8%. “These techniques can lead to significant reduction in energy consumption,” the researchers say. They add that the method also caused the processors to run at a lower temperature—which could trim the need for cooling.

Meta declined to comment on the research, but said it has had efforts to boost data-centre energy efficiency “since we started designing our first data center over a decade ago.”

Meantime, a team at the University of Michigan, University of Washington and University of California, San Diego devised an algorithm to modulate the use of power during training. The technique could cut power use by up to 30% , they say.

Show users AI’s impact

Some researchers believe companies should give users more context about the environmental impact of AI, to let them make more-informed decisions about the technology. Ren, of UC Riverside, proposes that AI providers disclose the approximate amount of electricity and water each query consumes—akin to how Google tells people searching for flights the amount of carbon emissions each trip would create.

Another proposal is to devise a rating system for the power efficiency of AI systems, akin to the government’s Energy Star ratings for home appliances and other products. Such a system could help people choose AI models for differing tasks based on their energy consumption, according to Sasha Luccioni , an AI researcher at Hugging Face, a company that makes machine-learning tools.

Using greener power

Academics and others have come up with other proposals to minimise AI’s environmental impact by tapping into green energy. For instance, companies might build more data centers in countries with abundant, low-emission power, such as hydropower in Norway or geothermal in Iceland. Or companies might do AI calculations at different locations at different times of the day, such as deploying computer centers with high use of solar power during the daytime or wind-powered ones when wind is more reliable at night.

Chilling the computers

Data-centre computers put out tremendous amounts of heat, and their temperature must be kept in a certain range, often 64 to 72 degrees, to prevent damaging the electronics. Traditionally, this has been done by high-power air conditioning. But air conditioning uses up to 40% of all the electricity consumed by a typical data centre, while devices called cooling towers that expel the heat to the outside air use a lot of water.

In response, the data-centre industry is moving to liquid cooling, which circulates a special liquid or cold water to “cold plates” that sit on top of the processor chips and keep them at a safe and efficient temperature range. The system, called direct-to-chip liquid cooling, uses less power than the traditional method—about 30% less, Nvidia says—because liquid is vastly better at removing heat from the electronics than blowing cold air over them.

Another method under development, called immersion cooling, involves placing the computers themselves inside big tanks of cooling liquid. While showing early promise, there are environmental concerns about the chemicals often used in the setup, says Mark Russinovich , chief technology officer of Microsoft’s Azure cloud-computing unit.

Some companies, meanwhile, are using computing gear that can withstand higher temperatures and doesn’t need as much cooling. Google says its data centres already are 1.8 times as energy efficient as the typical data centre, which it achieved in part by raising the inside temperature to 80 degrees. For every one-degree boost in their temperature, data centres can save 4% to 5% in energy costs, according to the Energy Star program.