You are hereHome CountriesKuwait
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: July 28, 2015
SAUDI ARABIA. Study by Glowork highlights women's perceptions before graduation, shows regional differences within the Kingdom, and the need to develop part time jobs and internship programs.
date:Posted: July 28, 2015
INTERNATIONAL. The undisputed king of oil and gas is making some moves that could change the face of the global refining sector; It all translates into lower prices of refined fuels that will eventually benefit Asian customers who will pay less for transportation, basic commodities and essential services.
date:Posted: July 28, 2015
INTERNATIONAL. Too often, we see the future as we see the past - through the distorted lens of the present; But whatever the time, direction or dimension we are operating in when forecasting geopolitical events, we must simultaneously exist in the past, present and the future to prepare for a world that we have yet to know.
INTERNATIONAL. The undisputed king of oil and gas is making some moves that could change the face of the global refining sector; It all translates into lower prices of refined fuels that will eventually benefit Asian customers who will pay less for transportation, basic commodities and essential services.
dhgate