Middle East

The momentum of the regional banking sector is gaining momentum

Despite the economic uncertainties brought about by the Covid-19 pandemic, GCC

It is in the process of recovery.

Overall, banks in the region have been promising in the past year. Total net income for the banking sector reached $ 9.4 billion in the third quarter of 2021, compared to $ 8.3 billion in the second quarter of 2021. Camcoin vest, An analysis of the finances reported by 60 GCC-listed banks in the third quarter revealed.

“Profit reported by Saudi Arabian banks reached a quarterly high of $ 3.5 billion, compared to $ 2.9 billion in the second quarter of 2021 and $ 3.2 billion in the third quarter of 2020. Banks in Qatar showed high single-digit profit growth of 7.7% and 7.3, respectively. ”The report suggests.

“Total total loans paid by listed GCC banks increased $ 28.3 billion quarter-on-quarter, primarily due to an increase of $ 13.9 billion due to increased lending in Saudi Arabia.

“Overall, the outlook for GCC Bank in 2021 is stable, and higher levels of activity will drive credit growth, which has a positive effect on asset risk,” said Alvarez & Marsal, Managing Financial Services. Director Asad Ahmed said. “There was some financial integration in the region. UAE and Saudi Arabia come to mind. This seems to have been caused by two factors. One is a common substantive owner with the intention of coordinating, The other is economical. In the latter case, the root cause could be asset-driven (quality and / or size) that leads to improved operational efficiency and thus ROE. “

Meanwhile, the future of regional banking space also looks promising. The S & P Global Ratings Report reveals that GCC Bank will benefit from the 2022 regional economic recovery against the backdrop of rising oil prices, support for government spending, and normalization of non-oil activity. The non-performing loan (NPL) ratio will increase over the next 12-24 months without exceeding 5%, compared to 3.7% on September 30, 2021.

“As the employment market tightens, inflation accelerates in recent months, and forward guidance from the Federal Reserve Board becomes more stringent, we expect three rate hikes in 2022. Will benefit from such an increase, assuming there is no significant impact on asset quality, “the S & P report added.

The decline in global liquidity suggests that it is likely to have a limited impact on GCC banks, thanks to GCC banks’ strong net external asset positions or limited net external debt positions. Strong capitalization and government support will continue to strengthen the creditworthiness of banks.



https://gulfbusiness.com/rising-momentum-of-the-regions-banking-sector/ The momentum of the regional banking sector is gaining momentum

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