GCC banks see flat performance in Q1

GCC banks are likely to report four percent YoY earnings growth in 1Q13, SICO Research’s latest report on GCC Banks 1Q 2013 result revealed Tuesday.

It said weaker earnings are forecast for Saudi banks on the back of lower fee income and tightening margins, yet Saudi banks’ long term fundamentals remain strong.

SICO expects KSA banks’ aggregate 1Q13 earnings to moderate to 2.6 percent YoY, as strong balance sheet growth will be offset by lower margins due to stiff competition and lower fee income. Saudi stock market turnover declined to $100 billion in 1Q13 from $279 billion in 1Q12, which is likely to adversely impact their trading-related fee income. On the other hand, Saudi banks’ balance sheet growth is likely to remain robust, with loans and deposits growing at 12.6 percent YoY in 1Q13.

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