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Monday, 26 June 2017

Islamic banks in the GCC face a tough year ahead | GulfNews.com

Islamic banks in the GCC face a tough year ahead | GulfNews.com:

"Islamic banks in the GCC are expected to face a tough year ahead as the slowdown in asset growth is likely to persist this year, according to global rating agency Standard & Poor’s. Islamic banks’ asset growth declined to 5.3 per cent in 2016 from 10.7 per cent in 2014. “In our base-case scenario, we assume that asset growth will stabilise at about 5 per cent as governments’ spending cuts and revenue-boosting initiatives, such as new taxes, reduce Islamic banks’ growth opportunities in the corporate and retail sectors. We see banks becoming more cautious and selective in their lending activities, triggering stiffer competition,” said Dr Mohammad Damak, Head of Islamic Finance, S&P Global Ratings. The impact of the slowdown will vary across markets. Although the economic slowdown will likely remain pronounced in Saudi Arabia, Islamic banks’ growth accelerated there in 2016, thanks to their strategy of increasing business among corporates and small and midsize enterprises (SMEs)."



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