Rated Gulf banks could absorb up to a $36 billion shock – AMEinfo

Rated Gulf banks could absorb up to a $36 billion shock – AMEinfo

Banks' strong earning capacity will help navigate the COVID-19, oil price shock. Saudi banks most resilient; Kuwaiti banks have the strongest capacity to withstand an increase in cost of risk. On average, GCC banks can absorb 2.7x normalized losses (the expected average or 'normal' level of annual credit losses, calculated by S&P based on an economic cycle of 12 years including three years of recession), but this masks a significant level of difference between banks.. S&P Global Ratings anticipates that the banks' profitability will deteriorate in 2020, because of the dual shock of COVID-19 and the decline in oil prices..