GCC banking sector performance to be resilient in 2018 in slow growth environment | GulfNews.com

GCC banking sector performance to be resilient in 2018 in slow growth environment | GulfNews.com:

"The banking sector in the Gulf Cooperation Council (GCC) is expected to deliver a stable performance in 2018, reflecting strong financial fundamentals, particularly in the largest banking systems such as the UAE and Saudi Arabia, according to rating agency Moody’s. While slow economic growth, fiscal and geopolitical risks are expected to pose challenges to profitability and loan quality of the region’s banks, the raging agency expects strong capitalisation levels with high loan-loss reserves providing banks strong loss-absorption capacity. “Low oil prices and [the] resulting fiscal consolidation measures have dampened economic activity in the GCC. Non-oil economic growth will remain modest but will pick up slightly in 2018 to 2.6 per cent as Brent oil prices stabilise at the upper end of our $40 (Dh146) and $60 (Dh220)/barrel band, opening some room for more gradual fiscal consolidation. Having said that, expected VAT [value-added tax] introduction could initially dampen non-oil growth, while extension of Opec [Organisation of the Petroleum Exporting Countries] production cuts throughout 2018 will weigh on real oil sector growth,” said Olivier Panis, a Vice-President and Senior Credit Officer at Moody’s. "



'via Blog this'