Gulf Banks To Escape Eurozone Turmoil, Says S&P
Published Tuesday, 10 July 2012 17:15 | Written by Amwal Al Ghad
Gulf banks are likely to continue their steady recovery from the 2008 crisis and remain isolated from eurozone turmoil for the rest of 2012 and 2013, according to a new report by Standard and Poor's.
The rating agency said that despite slower balance sheet growth, most GCC banks have maintained healthy earnings generation before provisioning.
"We believe the trend of declining loan loss provisions will continue for most of the banks in the Gulf Cooperation Council, resulting in further recovery in reported net profits despite adverse conditions in the eurozone and international banking markets," said Standard & Poor's credit analyst Timucin Engin.
S&P said even though pockets of risk persist, asset quality continues to improve, and as a result banks do not need to set aside as many provisions to cover their loan losses.