#Saudi banks will benefit from higher oil prices in wake of Ukraine conflict

Saudi banks will benefit from higher oil prices in wake of Ukraine conflict

Banks in Saudi Arabia stand to benefit from the latest shock caused by the conflict in Ukraine, while those in other emerging markets will face new risks as a result of the war, according to ratings agency Moody’s.

In a report on emerging market banks released today, the agency said the kingdom’s banks will benefit from rising oil prices, which will boost tax revenues, increase liquidity and lift economic growth, allowing the government to start unwinding five years of fiscal deficits.

“Higher oil revenues will also buoy investor confidence and increase flows of deposits into the banking sector.

“We expect real GDP to surge to 7.2 percent in 2022 and 4.5 percent in 2023, after tepid economic expansion in the years before the pandemic,” the agency said in its report.