Saudi Arabia urges stronger global action to protect children in cyberspace at UN    911 emergency centers handle over 2.8 million calls in March    Musk's X is suing India, as Tesla and Starlink plan entry    Tesla sales plunge after backlash against Elon Musk    Saudi Arabia posts SR49.8 billion travel surplus in 2024 as visitor spending hits SR153.6 billion    World leaders call Trump tariffs 'wrong' and 'unjustified'    Israel announces expansion of military operation in Gaza to seize 'large areas' of land    US cancels visa of Nobel Peace Prize winner Oscar Arias    Danish prime minister refutes US claim on Greenland on visit to the Arctic territory    Aubameyang fires Al Qadsiah into King's Cup final with stoppage-time winner over Al Raed    Cristiano Ronaldo joins Fatal Fury: City of the Wolves    Saudi Arabia welcomes trilateral border treaty between Tajikistan, Kyrgyzstan, and Uzbekistan    Swedish table tennis legend Jörgen Persson appointed head coach of Saudi national team    Danilo Pereira fires Al Ittihad into King's Cup final with dramatic stoppage-time double    Tebuk emir reviews rain response in Tayma    Saudi Arabia considers rent cap as part of major real estate reforms    Screen time in bed linked to insomnia, study finds    Mexico bans junk food in schools to fight childhood obesity epidemic    Sweet sales surge ahead of Eid as Saudi chocolate imports top 123 million kg in 2024    Saudi creatives shine at Jeddah's Fawanees Nights with art, fashion, and storytelling    Bollywood actress vindicated over boyfriend's death after media hounding    Grand Mufti rules against posting prayers and preaching in mosques on social media    King Salman prays for peace and stability for Palestinians in Ramadan message King reaffirms Saudi Arabia's commitment to serving the Two Holy Mosques and pilgrims    Bollywood star Saif Ali Khan 'out of danger' after attack at home in Mumbai    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Loan provisions curb Gulf bank momentum
Published in The Saudi Gazette on 17 - 08 - 2010

GCC banks' earnings in the second quarter of 2010 was considerably affected by the continuation of high provisions, said Global Investment House.
“While the top-line barely moved year-on-year, provisions grew by 5 percent year-on-year. Provisions, mostly emanating from loan defaults, shifted gears during the quarter under review, after taking a breather in first quarter of 2010, leading to a massive 48 percent quarter-on-quarter rise in second quarter of 2010,” it said.
It noted UAE stood out from its neighbors in the region given the fact that almost half the provisions taken in second quarter of 2010 came from its banks followed by Saudi Arabia, which contributed 23 percent to the provisions taken.
The aggregate net interest income of GCC banks grew by a meager1 percent year-on-year, showing stagnancy in the top-line, Global said.
The loss of momentum came about as sheer stagnancy in loans haunts the GCC banking sector. Loans growth remained diminished, growing 3.5 percent year on year in 2010 and 0.7 per cent year to date while the aggregate net interest margin of GCC banks tapered-off by 12 basis points over 2009.
Saudi Arabia and Qatar posted a 9 percent year-on-year decline and a 26 percent year-on-year jump, respectively.
Qatar's net interest income rode well due to a 46 percent year-on-year jump in Qatar National Bank's top-line. Kuwait posted a drop Shrinkage in the net interest income while that of UAE exhibited a healthy growth.
Provisions, mostly emanating from loan defaults shifted gears during the quarter under review, after taking a breather in first quarter of 2010, leading to a massive 48 per cent quarter-on-quarter rise in second quarter of 2010.
The UAE stood out from its neighbors in the region given the fact that almost half the provisions taken in second quarter of 2010 came from its banks followed by Saudi Arabia, which contributed 23 percent to the provisions taken.
Gauging a pick up in macro-economic activity across the GCC and certain country specific risks, Global maintains its positive stance on Qatar and is neutral on the banking sectors of the other GCC countries.
Meanwhile, Kuwait recorded a 20 percent of GDP fiscal surplus in 2009, outperforming its peers in the GCC,” said Charles Seville,director in Fitch's Sovereign and International Public Finance team. “But it suffered the deepest recession in the GCC as private sector confidence buckled and the financial sector coped with a sharp rise in impaired loans. On the plus side, the medium-term outlook has brightened following parliamentary approval for a long-awaited development plan and structural reforms.”
Fitch's estimate of Kuwait's fiscal breakeven oil price (the oil price that would be needed to balance the budget, when investment income is included) is lower than for either Saudi Arabia (‘AA-'/Stable) or Abu Dhabi (‘AA'/Stable), at $32 billion in FY10.
The breakeven oil price rises to $46 billion for the more expansionary FY11 budget but is still below that of peers. The balance sheet is among the strongest of Fitch-rated sovereigns and this is an overriding support to the ratings.


Clic here to read the story from its source.