Economy

UAE remains Saudi Arabia’s primary non-oil export destination in February despite drop

Follow-ups -eshrag News:

RIYADH: An economic rebound and higher oil prices have prompted Moody’s to change outlook for the banking systems of Saudi Arabia, Kuwait, UAE, Qatar, Oman and Bahrain from negative to stable. 

Many banks in the Gulf region will see increasing profitability and accelerating credit growth as operating conditions improve after the pandemic, according to the global rating agency. 

“We have changed banking outlooks in Gulf Cooperation Council states as the jump in oil prices is boosting economic activity and economies are recovering after the coronavirus shock,” said Vice-president senior credit officer, Nitish Bhojnagarwala. 

“Non-oil activities including tourism will also contribute to the improvement in some areas,” he added.

Saudi Arabian banks will see increasing profitability and faster credit growth, as high oil prices boost the economy, and as the government’s capacity to support lenders in a crisis will remain intact. 

The pick-up in lending growth will partly offset pressure on banks’ loan quality, as central bank loan repayment deferral programmes end, Moody’s explained. 

Banks in Oman and UAE are expected to maintain steady profitability and solid capital buffers. 

In Qatar, increased tourism around the FIFA World Cup to be held there this year is expected to support the economy. 

Kuwait’s gross domestic product growth in the non-oil sectors, where the banks do most of their business, is expected to be 4 percent in 2022 and 2023, after the 5 percent in 2021, according to Moody’s.  

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