Manama: Mahmood Rafique, Editor: GCC Banks are set to benefit from a regional economic recovery this year amid higher oil prices, still supportive government spending, and normalizing non-oil activity.
“We expect banks’ asset quality indicators to deteriorate only slightly as regulatory forbearance measures have helped the corporate sector to deal with the negative effects of the pandemic. In our view, the nonperforming loan ratio will rise in the next 12-24 months without exceeding 5%, compared with 3.7% at Sept 30, 2021,” S&P in its report said.
“Lower global liquidity is likely to have a limited impact on GCC banks thanks to their strong net external asset positions or limited net external debt positions. Qatar is more vulnerable than other countries due to its large and expanding net external debt position but there are some mitigants,” the report added.
Moreover, it said, strong capitalization and government support will continue to reinforce regional banks’ creditworthiness.
