GCC banks saw record loan growth in Q2 as economies revived

GCC banks saw record loan growth in Q2 as economies revived

Listed banks in the GCC continued to post robust growth in lending activity during the second quarter (Q2) of 2021, leading to record high loan books, Kamco Invest said in a new report. Aggregate gross loans at the end of Q2 reached $1.68 trillion, up 4.6 percent quarter-on-quarter (q-o-q) and 7.1 percent year-on-year (y-o-y), after a broad-based growth was seen in all markets, the report said. Net loans grew at a similar rate of 4.8 percent q-o-q to reach $1.6 trillion. A rebound in economic activity was evident in the PMI figures for UAE and Saudi Arabia that remained elevated during May and June, well above the growth mark of 50. Customer deposits also showed growth in almost all the markets during the quarter. Aggregate customer deposits increased by 4.6 percent to reach $2 trillion, a new record high for the GCC banking sector, compared with $1.9 trillion at the end of Q1-2021. The aggregate loan-to-deposit ratio for the sector improved slightly q-o-q by 20 basis points (bps) to 80.4 percent, the highest in the last five quarters, but still below pre-Covid-19 levels. Net profits remained stable during the quarter after recovering during Q1 to pre-COVID-19 levels. Profits reached $8.3