GCC banks’ profits, assets get a major boost from high oil prices

GCC banks’ profits, assets get a major boost from high oil prices

The GCC banks showed strong performance in their bottom lines in the second quarter of this year with net profits and assets reaching record levels, thanks to high oil prices.

According to Kamco Invest's latest quarterly report released on Sunday, GCC banking sector net profits reached another record level of $11.1 billion (Dh40.7 billion) in Q2 2022, registering a quarter-on-quarter growth of 1.9 per cent and year-on-year growth of 31.9 per cent.

Junaid Ansari, head of investment strategy and research, said the increase in aggregate profits was mainly led by higher revenues for the sector coupled with a slight drop in provisions during the quarter. The growth came after aggregates for all the countries in the GCC reported an increase, barring Kuwaiti banks that reported a q-o-q decline of 0.6 per cent, mainly led by higher operating expenses.

Omani banks reported the biggest q-o-q percentage increase in net profits during the second quarter at 13.9 per cent followed by Qatari and Bahraini banks with a growth of 3.6 per cent and 3.2 per cent, respectively.

Growth in Saudi Arabian banks stood at 2.7 per cent, while UAE banks showed flattish net profits during the quarter.

"The gain in oil prices came as a windfall gain