Banks in #Saudi, emerging markets will see spike in bad loans- S&P | ZAWYA MENA Edition

Banks in Saudi, emerging markets will see spike in bad loans- S&P | ZAWYA MENA Edition:

Banks in Saudi Arabia and more than a dozen other countries are likely going to see their profits deteriorate and bad loans spike this year, as emerging market (EM) economies are heading for “the worst in decades,” S&P said.

About one-third of lenders that the ratings agency tracks in15 emerging markets, which include the Gulf state - one of the largest Arab economies - now have a negative outlook as a result of the coronavirus pandemic. 

Bad loans are forecast to go up by half across the region or probably double in some economies. Lenders that have huge exposure to small businesses, as well as real estate and retail will be among those that will be heavily impacted.

“We expect asset quality to deteriorate across the board, with NPLs (non-performing loans) increasing by more than 50 percent on average and potentially doubling in some countries,” the ratings agency said on Thursday.