GCC banks face ‘earnings shock’ from lower oil price, Covid-19 – ZAWYA

GCC banks face ‘earnings shock’ from lower oil price, Covid-19 – ZAWYA

Islamic banks are likely to see a greater effect on asset-quality indicators.. GCC banks will see significantly reduced revenue and credit growth in 2020 as they face an earnings shock from the oil price drop and Covid-19 pandemic, S&P Global Ratings said.. In its report, S&P said Islamic banks are likely to see a greater effect on asset-quality indicators "since they typically have a higher proportion of exposure to real estate and cannot charge late payment fees.. Economic growth and credit growth in the GCC has already slowed since oil prices began to moderate in 2014.. A more protracted period of lower prices will strain asset quality," said Ashraf Madani, senior vice president and analyst at Moody's.. Although growth rates last year were almost the same as 2018, GCC conventional banks saw faster increases than Islamic banks. ".