The sustained growth in retail lending is a key source of strength for Saudi banks and that has largely mitigated the impact of the pandemic on their financial profiles, says rating agency Fitch.
“The retail segment supported the sector’s asset-quality metrics in 2020, and we expect it will soften the impact of an adverse operating environment for Saudi banks. Austerity measures, rising unemployment and weaker consumer confidence are the key risks,” said Amin Sakhri, an analyst at Fitch Ratings.
Retail lending has been a high-growth segment in Saudi Arabia in recent years and a key driver behind sector growth. Fitch Ratings expects it will continue to be so, as banks’ retail appetite remains high.
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