GCC banks 'stay resilient despite less supportive conditions'

Gulf Cooperation Council (GCC) banks face less favorable operating conditions, but fundamentals remain supportive, according to S&P Global Ratings' latest report.

The report, "Banks in Major GCC Economies Remain Resilient to Less Supportive Operating Conditions," published today (Sept 12), covers the banking systems in Saudi Arabia, the UAE, Qatar, and Kuwait. 

"We expect that GCC banks' capital buffers will remain comfortable, while a slowdown in credit growth and higher earnings will contribute to GCC banks' stable capital metrics," it said.

In the short term, however, rising interest rates and OPEC oil production cuts will constrain growth prospects for GCC banks, the report said.

"Despite a slight deterioration in asset quality indicators and an increase in the cost of risk, we expect GCC banks will report stronger profitability in 2023. This is because of higher net interest margins and generally lower-cost business models," S&P Global Ratings credit analyst Zeina Nasreddine said. - TradeArabia News Service

Source: https://www.tradearabia.com/news/BANK_413246.html