saudi banks more profitable than most gcc peers
Last Updated : GMT 09:40:38
Themuslimchronicle, themuslimchronicle
Themuslimchronicle, themuslimchronicle
Last Updated : GMT 09:40:38
Themuslimchronicle, themuslimchronicle

Saudi banks more profitable than most GCC peers

Themuslimchronicle, themuslimchronicle

Themuslimchronicle, themuslimchronicleSaudi banks more profitable than most GCC peers

Saudi banks are more profitable than most of their GCC peers
Jeddah - Arab Today

Moody’s Investors Service has revised its outlook for the Saudi banking system to stable from negative.
Saudi banks are more profitable than most of their Gulf Cooperation Council (GCC) peers, with an average ratio of net income-to-tangible assets of 1.9 percent as of 2016, on a par with Qatari banks, said a Moody’s report issued on Wednesday.
The stable outlook reflects high risk-absorption buffers and easing funding pressures, as Saudi banks’ credit profiles are expected to remain broadly stable over the next 12 to 18 months, the report said.
“Despite low oil prices, which we expect to fluctuate between $40 and $60 a barrel over the next 18 months, and cuts in oil production, the Saudi economy will gradually recover, supported by government spending,” said Olivier Panis, a vice president at Moody’s.
He added that as a result Saudi banks’ liquidity and funding conditions would improve.
“Although profitability and loan performance will continue to soften, Saudi banks will maintain robust capital and loss-absorption buffers compared to regional and international peers over the outlook horizon,” the analyst said.
According to Moody’s, the operating environment for Saudi banks will recover. While the rating agency expects real gross domestic product (GDP) growth to contract by 0.2 percent in 2017, increased government spending and projects to diversify economic output will support a gradual recovery of the non-oil economy, which will grow by 2 percent in 2017 versus 0.2 percent in 2016.
Consequently, Moody’s expects credit growth to remain low at 3 percent in 2017, but it is likely to gradually pick up from 2018.
Analysts expect non-performing loans (NPLs) to increase to 2.5 percent of the gross loans over the outlook horizon, from a low level of around 1.4 percent as of September 2016.
Although banks will also remain vulnerable to high single-party exposures and opacity in the corporate sector, they will maintain the highest level of loan-loss provisioning coverage in the region, the report said.
According to Moody’s, Saudi banks will maintain a solid operating performance, although subdued loan growth, rising provisioning charges and lower fee and commission income might weigh on profits.
The impact will be partly mitigated by stable margins, low operating costs and easing pressure on funding costs. Despite Moody’s expectation of reduced profitability, subdued loan growth will support capital adequacy, which will strengthen from already strong levels.
Moody’s said that access to funding will improve owing to liquidity injections from international sovereign debt issuances, the clearing of large volumes of overdue payments to contractors by the government in the fourth quarter of 2016 and modest credit growth.
However, deposit growth will remain low until economic activity picks up more materially in 2018.

Source: Arab News

themuslimchronicle
themuslimchronicle

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

saudi banks more profitable than most gcc peers saudi banks more profitable than most gcc peers

 



Themuslimchronicle, themuslimchronicle

GMT 06:40 2017 Saturday ,16 December

Walker needs brains not just brawn

GMT 08:15 2017 Thursday ,07 September

US oil giant ExxonMobil plans Cyprus gas exploration

GMT 18:11 2011 Monday ,18 April

Zimbabwe and Zambia in tug of war over Vic Falls

GMT 16:05 2017 Tuesday ,31 October

Qadih calls for involving private sector

GMT 09:20 2017 Wednesday ,15 November

Qualcomm spurns $130 bn Broadcom bid for big tech tie-up

GMT 13:43 2017 Tuesday ,24 October

Stabbed Russian journalist 'in recovery'

GMT 10:26 2017 Friday ,14 April

Sock topples Haas to reach ATP Houston quarters

GMT 14:00 2017 Saturday ,25 November

Sudan condemns terrorist attack in Egypt

GMT 09:40 2017 Monday ,04 December

Stade down Racing, Clermont edge plucky Agen

GMT 08:08 2017 Thursday ,05 October

Injury jinx strikes again as Iordache exits

GMT 11:20 2017 Tuesday ,05 December

Prodigal son: Saleh Saudi overture tips Yemen balance

GMT 09:35 2013 Saturday ,31 August

Afghan suicide attack kills 6, hurts 20 in south

GMT 23:36 2016 Sunday ,11 December

Suicide attack in Istanbul claims 29 lives

GMT 18:29 2013 Sunday ,10 November

Samsung\'s Galaxy Note 3 top 5m

GMT 14:52 2013 Sunday ,24 November

Computer game opponents begin to think, feel alike

GMT 18:55 2012 Wednesday ,02 May

8 Secret guy insecurities

GMT 19:27 2012 Thursday ,10 May

How to win over your boss

GMT 18:27 2012 Sunday ,29 April

Why I\'m better off without a baby

GMT 13:40 2012 Friday ,25 May

Sharnoubi to make documentary on singer Warda

GMT 12:58 2014 Friday ,28 November

Incredibly small apartment in Paris

GMT 00:44 2011 Sunday ,25 December

Modern glass house

GMT 10:51 2011 Tuesday ,05 July

Dior loses its way without creative director
Themuslimchronicle, themuslimchronicle
Themuslimchronicle, themuslimchronicle
 
 Themuslimchronicle Facebook,themuslimchronicle facebook  Themuslimchronicle Twitter,themuslimchronicle twitter Themuslimchronicle Rss,themuslimchronicle rss  Themuslimchronicle Youtube,themuslimchronicle youtube  Themuslimchronicle Youtube,themuslimchronicle youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2023 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2023 ©

muslimchronicle muslimchronicle muslimchronicle muslimchronicle
themuslimchronicle themuslimchronicle themuslimchronicle
themuslimchronicle
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
themuslimchronicle, themuslimchronicle, themuslimchronicle