Concerns grow over Gulf banks

Dozens of banks throughout the Gulf are in the process of renegotiating and restructuring debt for privately owned businesses that are facing difficulties as a result of the economic crisis, according to Moody's.

Mardig Haladjian, general manager at Moody's, told the Financial Times that almost every Gulf bank the rating agency had met with recently as part of an ongoing review "has engaged in at least two or three restructurings of customer loan relationships".

His comments highlight the scale of the impact of the economic crisis on the oil-rich Gulf, which had been going through a petrodollar-fuelled boom during which credit growth soared to record levels. Moody's rates around 55 banks in the Gulf.