Gulf banks could be forced to merge to avert a possible collapse resulting from a sharp decline in their performance because of the global financial crisis, a key Saudi investment fund reported yesterday.
While many banks in the six-nation Gulf Co-operation Council (GCC) managed to withstand the crisis because of their low vulnerability and strong government intervention, other banks with low capitalisation still face major risks and could resort to mergers to save themselves, said NCB Capital, an affiliate of the Saudi National Commercial Bank.
In its April report, NCB Capital said banks in the six members are facing what it described as a strenuous time with a slowdown in credit growth, declining interest margins, and increasing pressure on profits from higher provisions due to deteriorating asset quality and investment losses on equity exposure.
No comments:
Post a Comment