UAE remains top destination for Saudi Arabia’s non-oil exports in February despite decline

RIYADH: An economic rebound and higher oil prices prompted Moody’s to change the outlook for the banking systems of Saudi Arabia, Kuwait, United Arab Emirates, Qatar, Oman and Bahrain from negative to stable.

Many banks in the Gulf region will see their profitability increase and credit growth accelerate as operating conditions improve after the pandemic, according to the global rating agency.

“We have changed the banking outlook in Gulf Cooperation Council states as soaring oil prices stimulate economic activity and economies rebound from the coronavirus shock,” the senior vice president credit officer said. , Nitish Bhojnagarwala.

“Non-oil activities, including tourism, will also contribute to improvement in some areas,” he added.

Saudi banks will experience rising profitability and faster credit growth as high oil prices stimulate the economy and the government’s ability to support lenders in a crisis will remain intact.

Recovering loan growth will partly offset pressure on banks’ loan quality as central bank loan repayment deferral programs come to an end, Moody’s said.

Banks in Oman and the United Arab Emirates are expected to maintain stable profitability and strong capital buffers.

In Qatar, the increase in tourism around the FIFA World Cup to be held there this year should support the economy.

Kuwait’s gross domestic product growth in non-oil sectors, where banks do most of their business, is expected to be 4% in 2022 and 2023, after 5% in 2021, according to Moody’s.

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