You are hereHome CountriesQatar
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: April 19, 2014
UAE. Key sectors driving growth in the housing market are the tourism, hospitality, education and healthcare sectors, which is translating into robust population growth and demand.
date:Posted: April 17, 2014
KUWAIT. According to a newly released report by Kuwait Finance House Research, the global sukuk market saw a modest volume of US$31.14 billion in new sukuk issuances in 1Q2014. This volume represents a drop of 9.82% compared to US$34.53 billion worth of issuances in 1Q13.
date:Posted: April 16, 2014
INTERNATIONAL. The WGC pointed out that the Chinese bank savings amount to US$7.5 trillion but only about US$300 billionn is allocated to gold, signifying the potential for gold demand to grow as Chinese wealth climbs.
dhgate