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Tuesday, 25 October 2016

Gulf Banks Feel the Pain as Investors Wonder What Will Come Next - Bloomberg

Gulf Banks Feel the Pain as Investors Wonder What Will Come Next - Bloomberg:

"Banks from Saudi Arabia to Dubai are feeling the pain of the Middle East’s slowdown.
Many of the region’s largest banks missed analysts’ earnings estimates in the third quarter as lenders provisioned for higher bad loans and funding costs increased. National Commercial Bank, Saudi Arabia’s largest lender, said profit fell 1.5 percent to 1.96 billion riyals after impairment charges increased. Emirates NBD PJSC, the United Arab Emirates’ biggest bank, posted a profit of 1.66 billion dirhams, missing analyst estimates for earnings of 1.83 billion, after provisions increased at its Islamic unit.
The slump in crude prices has sparked a wave of budget cuts across the oil-rich Gulf region, prompting economic growth to slow and liquidity problems for banks accustomed to relying on countries’ excess energy receipts for funding. Government delays in paying contractors in Saudi Arabia and defaults among small and medium-sized enterprises in the U.A.E. are contributing to rising provisions, while funding costs in Saudi Arabia are at a 7-year high."



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