GCC bank assets surge 3.1 per cent to $2.4trn

MANAMA: GCC banks continued to strengthen their aggregate balance sheets during Q4-19 as listed banks in all the six GCC countries reported higher total assets during the quarter.

According to a report by Kuwait-based Kamco Research, which analyses financials reported by 61 listed banks in the GCC for Q4-19, aggregate total assets increased by 3.1 per cent quarter-on-quarter to $2.4 trillion compared with $2.29trn at the end of Q3-19.

Each of the six GCC countries showed a y-o-y and q-o-q increase in net loans and customer deposits during the quarter, barring Omani banks that reported a slight drop of 0.1pc as compared with Q3-19.

As a result, the aggregate loan-to-deposit ratio improved by 20 bps to reach 80.7pc during Q4-19 as compared with 80.5pc in Q3-19 and in Q4-18.

Asset growth during the quarter came mainly on the back of Islamic banks that grew assets at a relatively faster pace of 3.5pc as compared with a q-o-q growth of 2.9pc for the conventional banks.

In terms of y-o-y growth, however, conventional banks showed a higher growth of 10.3pc vs 8.6pc for Islamic banks.

The growth in earning assets was slightly smaller at 2.9pc q-o-q that reached $1.97trn in Q4-19 as compared with $1.92trn during Q3-19.

Net loans growth stood at 3.1pc q-o-q, a decline of 30 bps from the previous quarter’s growth, to $1.44trn as compared with $1.4trn at the end of Q3-19 ($1.31trn at the end of last year).

On the other hand, the quarterly growth in customer deposits was 3pc, slightly slower than last quarter’s growth rate.

Net interest margins (NIM) remained largely flat across the GCC countries during Q4-19 resulting in flat NIM at the GCC level at 3.1pc.

Saudi Arabia recorded the highest NIMs in the GCC at 3.7pc led by a relatively higher loan-to-deposit ratio as well as a vibrant lending activity due to the active project market.

Meanwhile, non-interest income declined in four out of the six GCC markets.

Total bank revenues for GCC-listed banks reached $22.1 billion during Q4-19 as compared with $21.8bn during Q3-19, a q-o-q growth of 1.4pc.

Aggregate revenues for each of the GCC countries, barring UAE-listed banks, increased during the quarter with Bahraini banks reporting the biggest growth of 12.5pc.

The growth in GCC bank’s net interest income (NII) was the highest in the last 10 quarters during Q4-19 at 5.3pc to $15.7bn vs. $14.9bn during Q3-19.

The increase was mainly led by 8.1pc growth in NII for Saudi Arabian banks followed by 5.3pc growth for Bahraini banks.

Source: http://www.gdnonline.com/Details/788764