GCC banks push on with funding; customer deposits remain main source
- Date: 06-Oct-2021
- Source: Arab News
- Sector:Financial Services
- Country:Gulf
GCC banks push on with funding; customer deposits remain main source
MOSCOW/CAIRO: The Gulf Cooperation Councilâs banking sector continues to show signs of strengths with core customer deposits remaining the main source of funding for the regional banks, a report by S&P Global rating said. The ratings firm said Saudi Arabia led the region in lending which grew by 7.9 percent. Corporate lending and mortgage activity dominated the scene. Growth in the Saudi banksâ lending pushed the overall GCC annualized rate to 8.4 percent in 2021, up from 6.6 percent in 2020. As compared to the Kingdom, the GCC countries recorded slower growth in their offered loans. Most notably, the UAE had a very small (annualized) growth in lending; amounting only to 0.6 percent. However, S&P expects this to change in 2H 2021 with the start of Expo 2020. Apart from Qatar, only Bahrain exceeded the 10-percent mark for the net external debt/systemwide loans ratio while other countries such as Saudi Arabia and the UAE reported negative values; a sign that the majority of banks in the region are mainly depending on core customer deposits not external funding. On the other hand, Qatarâs banking system increased its wholesale funding significantly in the last few years as its net external debt/systemwide loans