Asset quality in Saudi, Qatar and the UAE most resilient to oil shock | GulfNews.com:
"Banks in Saudi Arabia, Qatar and the UAE are better placed than other Gulf Cooperation Council (GCC) peers to cope with an eventual deterioration in asset quality brought about by a prolonged period of weak oil prices, according to rating agencies.
“We examined the impact of lower for longer oil prices on asset quality across the region and concluded that loss-absorption capacity in the Saudi banking sector ranks highest among GCC countries and that both Saudi Arabia and Qatar would continue to offer the soundest lending opportunities under that scenario, suggesting impaired loan ratios should increase more slowly in these countries than their peers,” Analysts with Fitch ratings wrote in a recent note.
While the operating environment for banks is expected to soften, Moody’s expect the UAE banks’ solid profitability and capitalisation levels are expected to provide protection against rising problem loans, while sufficient liquidity will cushion against reduced flows of government deposits into the banking system as lower oil prices impact government revenues, according to Moody’s."
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