S&P: Gulf Banks on path to recovery

Gulf banks will likely continue their steady recovery from the global financial crisis this year, aided by healthy economic growth in the Gulf cooperation Council (GCC) and still high oil prices, says Standard & Poor's Ratings Services today (20 March) in the report A Growing Economy And Strong Capitalization Keeps Gulf Banks On A Path To Recovery.

S&P's forecast for average 4.6 per cent GDP growth in the GCC for 2013 should keep demand for bank credit high and expand banks' earnings. "We believe strong bank lending on the back of corporate and infrastructure growth will help expand revenues of banks in Saudi Arabia, and Qatar," said Standard & Poor's credit analyst Timucin Engin. "Specifically, we expect average lending growth to remain above 10 per cent level for Saudi Arabia."

"In Kuwait, the United Arab Emirates (UAE), and Bahrain, however, which have seen a less pronounced rebound in growth, we envisage a slower pick-up in lending. Yet, loan losses are gradually declining at banks in these countries because they cleaned up their balance sheets between 2008 and 2012. This should continue to foster a recovery in profitability in the region, albeit at a slower pace than in recent quarters.

Read more: http://www.gulfbase.com/news/s-p-gulf-banks-on-path-to-recovery/232187