Saudi, U.A.E. Banks to See Jump in Loan Demand as Profit Lags - Bloomberg:
While banks in Saudi Arabia and the United Arab Emirates can look forward to burgeoning loan growth in 2020, higher earnings could be slow to follow as lower interest rates pressure profit margins.
Lending in the U.A.E. is expected to get a lift from Dubai’s hosting of a six-month exhibition involving more than 190 countries. In addition, economic growth is forecast to rise to 2.5% from 1.6% last year, according to estimates compiled by Bloomberg. A regional expansion by U.A.E. banks may also add to revenue, as a government-backed mortgages program in Saudi Arabia fuels demand for home loans.
“Expo 2020 is a key catalyst -- which can offer a boost to both corporate and consumer spending -- and provide impetus to tourism,” JPMorgan Chase & Co. analyst Naresh Bilandani said in an email. “We’re seeing an improvement in credit volumes in Saudi Arabia, a recovery in loan growth in Turkey in the fourth quarter of 2019, and strong volume in Egypt. These trends will also be supportive of U.A.E. banks’ loan growth in 2020.”
While banks in Saudi Arabia and the United Arab Emirates can look forward to burgeoning loan growth in 2020, higher earnings could be slow to follow as lower interest rates pressure profit margins.
Lending in the U.A.E. is expected to get a lift from Dubai’s hosting of a six-month exhibition involving more than 190 countries. In addition, economic growth is forecast to rise to 2.5% from 1.6% last year, according to estimates compiled by Bloomberg. A regional expansion by U.A.E. banks may also add to revenue, as a government-backed mortgages program in Saudi Arabia fuels demand for home loans.
“Expo 2020 is a key catalyst -- which can offer a boost to both corporate and consumer spending -- and provide impetus to tourism,” JPMorgan Chase & Co. analyst Naresh Bilandani said in an email. “We’re seeing an improvement in credit volumes in Saudi Arabia, a recovery in loan growth in Turkey in the fourth quarter of 2019, and strong volume in Egypt. These trends will also be supportive of U.A.E. banks’ loan growth in 2020.”
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