Outlook: Non-performing loans will hinder MENA banks’ recovery – ZAWYA

Outlook: Non-performing loans will hinder MENA banks’ recovery – ZAWYA

Outlook: Non-performing loans will hinder MENA banks' recovery. In the Gulf countries at least, NPL ratios are generally low and banking sectors are well positioned to withstand a jump in bad loans: Capital Economics' James Swanston. The main obstacle to the region's banks is the rise in non-performing loans (NPLs), according to London-based economic research consultancy Capital Economics.. In Saudi Arabia and Kuwait, for instance, we estimate that NPL ratios would have to increase from just under 2% at present to 13-18% before tier 1 capital ratios fell below Basel III minimums," he said.. But a period of weak economic growth has led to a steady rise in the NPL ratio in the past couple of years," Swanston added..