Gulf banks' capital expected to remain high, says S&P report
Source: Standard & Poor's Ratings Services , Author: Posted by BI-Me staff
Posted: Tue June 26, 2012 4:00 pm

INTERNATIONAL. Banks in the Gulf Cooperation Council (GCC) region have capitalization that generally exceeds their international peers', says Standard & Poor's Ratings Services in its report "Gulf Banks' Capital Positions Compare Well With Those Of Global Banks," published today.
 
Our risk-adjusted capital (RAC) framework, which we use to measure banks' capital adequacy, indicates that the average RAC ratio for GCC banks stood in the 12%-13% range as of end-December 2011--about 5 percentage points higher than the 7.4% average we projected for the 100 largest banks we rate in September 2011.

"We believe there are two primary factors underlying GCC banks strong capitalization metrics," says Standard & Poor's credit analyst Paul-Henri Pruvost.

"First, banks in all GCC countries, except Saudi Arabia, must maintain regulatory capital adequacy ratios above 10%. In addition, GCC banks tend to operate with substantial headroom ranging from 3% to 23% for the banks we rate," added Mr. Pruvost.
 
While GCC banks tend to outdo their larger international peers in terms of capitalization, they have weaker risk positions. Their risk profiles include sizable single-name, sector, and geographic concentration in countries that have higher economic risk than more mature markets in Western Europe or North America.

Still, these risks aren't sufficient to threaten their capital positions, which we expect will remain broadly stable over the next two years. This is because we forecast subdued growth in risky assets, particularly corporate financing, combined with a gradual recovery in internal capital generation thanks to reduced impairment charges.

Our expectations for GCC banks reflect this: 21 of the 26 GCC banks we rate have stable outlooks.

 

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

date:Posted: December 30, 2016
UAE. Booz Allen Hamilton forecasts energy trends in 2017; In the oil and gas industry, as well as in electric power, major internal and external forces are driving change, requiring industry leaders to revisit strategies.
date:Posted: December 21, 2016
UAE. PwC Middle East releases report on the Middle East's shopping habits; Online retail, rise of millennial shoppers and social media are disrupting the face of Middle Eastern retail.
date:Posted: December 20, 2016
INTERNATIONAL. Fjord Trends 2017 takes a provocative look at the digital developments to watch in the year ahead, according to Fjord, design and innovation from Accenture Interactive.
dhgate

Warning: include_once(/home/Domains/b/i/www.bi-me.com/public_html/adfiles/www/yes/shabs/mainads/mlads.php) [function.include-once]: failed to open stream: No such file or directory in /home/www/virtual/bi-me.com/htdocs/adfiles/www/yes/shabs/mainads/menu.gif on line 2

Warning: include_once() [function.include]: Failed opening '/home/Domains/b/i/www.bi-me.com/public_html/adfiles/www/yes/shabs/mainads/mlads.php' for inclusion (include_path='.:/usr/share/php:/usr/share/pear') in /home/www/virtual/bi-me.com/htdocs/adfiles/www/yes/shabs/mainads/menu.gif on line 2

Fatal error: Class 'MLAClient' not found in /home/www/virtual/bi-me.com/htdocs/adfiles/www/yes/shabs/mainads/menu.gif on line 7