Riyadh – Mubasher: Moody's Investors Service expected that Saudi banks would face challenges in 2017 amid an increasing cost of risk and subdued credit growth that, despite easing funding costs, will negatively affect top-line revenues.
The agency reported that the banks’ profits decreased 5.4% year-on-year, mainly because of rising provisioning charges.
The 2016 preliminary results also show a credit contraction over the past two quarters of 2016, leading to an overall 3% reduction in banks’ net loans in the second half of 2016, versus 5% growth in the first half of 2016, according to Moody’s published report.
Moody’s added that the return on assets reached 1.9% compared to 2% in 2015 and expected that the bank’s profitability will continue to outperform other Gulf Cooperation Council banking systems.
