Shaken by the global financial distress and faced with a bleak 2009, banks in the Gulf states have insufficient liquidity to spark recovery, according to regional banks.
Since they rely heavily on lending in the absence of other major investment tools and growing risks in world markets, a sharp slowdown in their deposit build-up is expected to smother their performance in 2009 after nearly seven years of high earnings because of the oil boom.
Official figures showed there was a decline in the assets of most banks in the six-nation Gulf Co-operation Council (GCC) this year, while deposits with these banks have either slowed down or dropped for the first time in many months.
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