FinancialNews

Home

Investor Relations

Financial News

15-09-10

Kamco: GCC banks to make profits this year

(MENAFN) A statement issued by Kamco, the Kuwait-based investment firm, said that in spite of the slowdown in credit growth, banks in the GCC will continue to make profits as the Gulf banking system has shown flexibility to the economic recession helped by the liquidity and prudential measures introduced by the monetary authorities, Gulf News reported. Due to the recession, the banking sector in Bahrain was negatively affected and was noticeable in the sharp drop in last year's profitability with the net earnings of commercial banks decreasing 35 percent to $362 million. The main reason behind this decline was the elevation in loan loss requirements and the impairment of investments which amounted to $330 million and $362 million in 2008 and 2009 respectively. In Saudi Arabia, the banking system is sufficiently capitalized and illustrated more flexibility to the consequences of the recession than its peers in the GCC region, according to the report. The banking sector in Kuwait is expected to keep on facing challenges in the medium term while in the UAE, the banking sector's capitalization is to remain sound and is sufficient to absorb the debt problems faced by Dubai Government related entities. The Qatar banking sector is mostly concentrated in the consumption, real estate and construction and public sectors which together constitute around 71 percent of Qatari banks' loan range but the real estate and construction sectors account for around only 21 percent of total loans. In Oman, banks are expected to remain profitable despite a considerable raise in provisioning.

Follow us

Terms & Conditions | Privacy & Security | Contact Us | Sitemap