Saudi Arabia’s 10 biggest commercial banks are reporting weaker earnings for the final quarter of 2008, revealing that they have not been spared the cocktail of weaker economic growth, tighter funding and falling asset prices that have battered counterparts across the region.
Saudi Arabia’s largest bank, National Commercial Bank (NCB), yesterday issued the latest in a series of weak results, announcing a net loss for the fourth quarter of 2.55 billion riyals (Dh2.49bn). Full-year profits, it said, fell 66 per cent compared with 2007 to 2.03bn riyals.
The poor results from Saudi Arabia’s financial sector, until now considered relatively sheltered, illustrate what analysts say is a deteriorating operating environment for banks and companies this year. What began as a financial crisis in the West that sparked a global recession is now coming full circle, with low growth and weak corporate profits sapping loan demand and pushing more borrowers into default.
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