GCC lending sees marginal impact of higher interest rates

GCC lending sees marginal impact of higher interest rates

The GCC banking sector witnessed the initial impact of higher lending rates during Q3-2023 as credit facilities reported by listed banks in three out of six countries in the region declined as compared to Q2-2023, says Kamco Invest.

Nevertheless, aggregate lending at the GCC level showed a growth of 1.5% backed by resilient lending growth in Saudi Arabia and UAE while listed banks in Qatar showed a marginal growth, says the regional non-banking financial powerhouse headquartered in Kuwait.

The growth was mainly led by a robust projects market pipeline as well as government efforts to reduce the impact of higher interest rates.

Aggregate gross loans

Aggregate gross loans for GCC-listed banks reached a new record high of $1.95 trillion at the end of Q3-2023. The q-o-q growth stood at 1.5% or $28.9 billion. Similarly, aggregate net loans showed a slightly higher growth of 1.6% during the quarter to reach $1.85 trillion. The y-o-y growth was a strong 6.8% for both net loans and gross loans. On the liquidity front, customer deposits increased at a similar pace of 1.5% q-o-q to reach $2.34 trillion after a decline in customer deposits in Qatar, Bahrain and Oman was more than offset by higher