Covid-19 to test mettle of bank lending in GCC

Covid-19 to test mettle of bank lending in GCC

The knock-on effects of lower economic growth and oil prices in the wake of the Covid-19 outbreak will further slow lending growth and increase the overall stock of problem assets at GCC banks, S&P Global Ratings said in a new study.. The effect of the expanding epidemic on global growth has direct implications for the GCC countries, said the report titled Prolonged Covid-19 disruption could expose the GCC's weaker borrowers.. The publication follows recent revisions to its oil price assumptions to $40 per barrel in 2020 from $60 previously. ". We estimate that the volume of vulnerable goods exports ranges from 53 per cent of total exports for Oman to about 17 per cent for Bahrain," the ratings agency said.. The report said the GCC's hospitality industry, which includes sectors like airlines, hotels and retail, will see lower revenue because of decreased tourism and business flows, as travel aversion and restrictions bite during the peak tourism season.. The Central Bank of the UAE recently formally requested banks to implement measures to counteract the effects of the epidemic including rescheduling loans, offering temporary deferrals on monthly loan payments and reducing fees and commissions.. Management consultancy Oliver Wyman has also warned that