‎GCC banks to post strong profit in 2022, close to pre-COVID levels: S&P Global

‎GCC banks to post strong profit in 2022, close to pre-COVID levels: S&P Global

S&P Global Ratings said that Gulf banks are expected to record profit close to pre-COVID levels by the end of 2022, driven by the economic recovery, as banks benefited from high oil prices, improved confidence, and major government projects, especially in Saudi Arabia.

The ratings agency also stated that its expectations for the Gulf banks for the year 2023 do not seem as certain as for 2022, as it sees a number of risks represented in expected slowdown in the global economy, which may affect the region in terms of oil prices, and the banks’ exposure to high-risk countries such as Turkey and Egypt, in addition to potential restrictions on liquidity to finance growth as domestic and global liquidity becomes less abundant.

S&P also indicated that, despite these risks, its outlook bias was firmly positive, with about 35% of ratings carrying positive outlooks either for potential improvement in their respective sovereign's creditworthiness or idiosyncratic reasons.

With regard to Saudi banks, the ratings agency said that the growth of banks in the first half of 2022 continued strongly, backed by real estate loans and corporate loans. It further pointed out that banks capitalize on the large zero-interest deposits, and high interest rates, noting that