The outlook for GCC banks for the next 12 to 18 months is stable due to the economic recovery in the region, Moody's Investors Service said in a report published on Tuesday. The rise in oil prices.
Economic growth in 2022 will reflect a gradual increase in hydrocarbon production and a strong recovery in other sectors of the economy, said Ashraf Madani, Vice President - Senior Analyst at Moody's and author of the report. Economy. The quality of banks' assets will remain high even as non-performing loans rise slightly as the payment holidays expire.
Madani added: Regulatory measures and large infrastructure projects will support credit growth in 2022. For example, completing large infrastructure projects, such as the World Cup soccer stadiums In Qatar, mega projects in Saudi Arabia as part of the (Vision 2030) program will drive demand for credit and raise private sector debt.
Gulf banks hold solid reserves of liquid assets, averaging 25%-30% of their banking assets, which Moody's expects to remain stable and provide a buffer against unexpected shocks. .
The loan performance will be impaired at the end of the repayment period, and the impact will be greater in the UAE and Bahrain, while it is less pronounced in Qatar and Kuwait.
GCC governments' willingness to support banks in crises remains very high, and most of them have a great capacity to provide support thanks to large sovereign wealth funds.
