Resilient lending growth in GCC despite decades high rates

Resilient lending growth in GCC despite decades high rates

Muscat: The GCC banking sector witnessed continued growth in lending during the second quarter of 2023 despite interest rates reaching decades-high levels following rate hikes in the US, according to a new report.

“Aggregate outstanding credit facilities in almost all the countries in the Gulf Cooperation Council (GCC) showed sequential growth during the quarter mainly led by a robust projects market pipeline as well as government efforts to reduce the impact of higher interest rates,” Kamco Invest said in its latest report titled 'GCC Banking Sector Report-Q2-2023 August-2023'.

“Moreover, several new big-ticket projects and reform initiatives were announced in the GCC giving a further boost to corporate lending,” the report further added.

Aggregate gross loans for GCC-listed banks reached a new record high of $1.9 trillion at the end of the second quarter of 2023. The quarter-on-quarter (q-o-q) growth stood at 1.9 percent or $36.3 billion backed by growth in all markets in the GCC. Similarly, aggregate net loans showed a slightly smaller growth of 1.7 percent during the quarter to reach $1.8 trillion.

“On the liquidity front, customer deposits increased at a smaller rate of one percent q-o-q to reach $2.3 trillion after a decline in customer deposits in Qatar and Kuwait was