The profitability of Saudi banks will surpass those of its GCC peers in 2021, despite low interest rates and the elevated cost of risk, according to Roman Rybalkin, associate director at S&P Global Ratings.
“After the shocks witnessed in 2020, the Saudi economy is expected to recover in 2021-2022 due to an increase in global demand for oil and increase of private consumption. By 2022, we expect the expiry of OPEC+ quotas and higher oil prices to boost economic activity to close to 3 percent,” he told Arab News.
While he believed that real gross domestic product (GDP) will not return to pre-pandemic levels until next year, he said the size of the economy, conservative regulation and lack of aggressive growth pre-2020 will help the Kingdom’s banking sector begin to return to normal over the next 12 to 24 months.
Last year, the Kingdom’s banking sector witnessed increased credit growth, on the back of stronger mortgage and small loan lending, and Rybalkin has forecast that this trend will remain strong into 2021-2022.
“After the shocks witnessed in 2020, the Saudi economy is expected to recover in 2021-2022 due to an increase in global demand for oil and increase of private consumption. By 2022, we expect the expiry of OPEC+ quotas and higher oil prices to boost economic activity to close to 3 percent,” he told Arab News.
While he believed that real gross domestic product (GDP) will not return to pre-pandemic levels until next year, he said the size of the economy, conservative regulation and lack of aggressive growth pre-2020 will help the Kingdom’s banking sector begin to return to normal over the next 12 to 24 months.
Last year, the Kingdom’s banking sector witnessed increased credit growth, on the back of stronger mortgage and small loan lending, and Rybalkin has forecast that this trend will remain strong into 2021-2022.
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