Moody's has changed the outlook for the banking system in Saudi Arabia from stable to positive.
In a recent report, Moody's stated that high oil prices and the Kingdom's reform plan have boosted economic growth, business confidence and government spending.
The agency added that the future outlooks of the banking systems in the United Arab Emirates, Bahrain, Oman, Qatar and Kuwait remain stable.
Nitish Bhojnagarwala, Senior Vice President at Moody's, said that banks in the GCC countries benefit from operating conditions supported by high oil prices that promote private consumption and investment in non-hydrocarbon sectors of the economy. The kingdom is growing to support banks in the event of crises. This is reflected in our decision to change our outlook on its banking system to a positive one.
The report added that Moody's takes into account the liquidity of Gulf banks and strong capital margins; We expected the economic expansion to continue during the next period of 12 to 18 months. And the possibility of government support for banks if they encounter financial problems. Concentrated lending in a few large borrowers and sectors remains a major concern for banks in the region.
It is worth noting that last April, Fitch Ratings raised the ratings of 8 Saudi banks, after raising the sovereign credit rating of the Queen.
