The Gulf banking sector will remain resilient to global financial turmoil, according to a report published on Wednesday by Standard & Poor’s Rating Services.
S&P credit analyst Mohamed Damak said the current challenges in international markets will not dampen the performance of the banking sector in the GCC.
“Gulf banks are benefiting from the rosy environment in their home markets and carry limited exposure to US subprime and structured investment products. As a result, business volumes are expanding, provisioning needs are minimal, and capital and commitment are forthcoming from deep-pocketed shareholders,” said Damak.
Standard & Poor’s did not discount the existence of risk factors in the region as “Gulf banks carry a high amount of young loans on their balance sheets that have been untested by economic dislocations, including fast-growing exposures to the real estate sector.”
Gulf banks resilient to global market crisis: S&P