GCC banking sector outlook: Oil price drop, COVID-19 to hit profits in 2020 | ZAWYA MENA Edition:
Conventional and Islamic banks in the Gulf Cooperation Council (GCC) countries will see a drop in revenue and credit growth in 2020, according to S&P Global Ratings.
The sharp drop in oil prices and measures implemented by regional governments to contain transmission of the coronavirus (COVID-19) will take a toll on sectors such as real estate, hospitality, the rating agency said in a new report.
“Under our base-case scenario, we assume that these measures will be relatively short lived and forecast a gradual recovery in non-oil activity from third-quarter 2020. However, the severe shock could cause irreparable damage to some parts of the non-oil economy. Furthermore, if the recovery takes longer than we expect, GCC banks could feel greater pressure,” Mohamed Damak, primary credit analyst, said in the report.
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