Dubai – Decypha: Funding conditions for banks in the Gulf Cooperation Council (GCC) are expected to improve in the coming 12 months, according to a report by Moody's Investors Service.
Reasons attributed in the report include stabilising oil prices between $40-$60 per barrel, large international sovereign debt issuances, lower credit growth, and increasing corporate deposits in the region's banking. Additionally, it is believed that slower economic growth will subdue lending activity and reduce funding pressures for banks.
In terms of Omani and Qatari banks, they are expected to witness an ease in liquidity. The report noted the resilience of banks in both countries to the prolonged oil price drop.
In terms of the United Arab Emirates (UAE) banks, the report highlighted that as of June 2016 net loans to deposits ratio is 94%.
Kuwaiti banks, which the report states as the most liquid in the region, are expected to be well-cushioned by liquid assets that amounted in 2016 to 36% of tangible banking assets. Kuwaiti banks also have a net loans to deposits ratio of 82% as of June 2016.
By Decypha News Editorial Team
