Riyadh – Mubasher: Fitch Ratings expected that the profits of the Saudi banks will continue declining in 2017, reflecting rising impairment charges and funding costs.
The rating firm added that the Saudi banks have passed the effects of the liquidity crisis hit the banks sector in 2016, by the support of the authorities.
Liquidity metrics have recovered at banks and the average liquidity coverage ratio levelled up to 204% by end of 2016, losing just one percentage point year-on-year, the report said.
Moreover, Fitch forecasted that funding costs will rise in 2017 to more than the double of 2016.
Despite the pressure on earnings, the main banks are still profitable as per the international standards, with an average return on assets of 1.7% in 2016 compared to 1.9% 2015.
