Moody’s: An increase in the profitability of Saudi banks and an acceleration in credit growth


Moody’s said in a report – yesterday, Tuesday, that the outlook for the banking systems of the Gulf Cooperation Council countries has changed to stable from negative, with improved operating conditions after the “Covid-19” pandemic. We changed banking expectations in the Gulf countries as the jump in oil prices boosts economic activity and economies recover after the Covid-19 shock, and non-oil activities including tourism will contribute to the improvement in some areas. Saudi banks will see increased profitability and accelerated credit growth as oil prices rise to support the economy. The recovery in lending growth will partially offset pressure on bank loan quality as the central bank’s loan deferral programs come to an end. While the stable outlook also reflects our expectation that the government’s ability to support banks in crises will remain the same. Banks in Oman and the United Arab Emirates will maintain stable profitability and strong capital buffers, while Bahraini banks now enjoy flexibility in funding and liquidity after the economic shock caused by Corona.

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