Standard & Poor's: Gulf Banks are Able to Deal with Shocks

  • GCC Countries
  • 24 April 2020
1

Standard & Poor's credit ratings agency revealed that the strong ability of Gulf banks to make profits will help these banks to face the shocks associated with the COVID-19 epidemic and the decline in oil prices, and protect their hybrid capital tools.

According to the agency, most of the Gulf banks classified with the agency enjoy relatively strong profitability, and these banks follow a conservative approach in calculating and allocating loan loss provisions. Indicating that Gulf banks classified with the agency are able to absorb shocks of up to $36 billion before starting to exhaust their capital bases. This is equivalent to about three times the expected losses under normal conditions, according to the agency's calculations, which involve a large level of pressure.

The agency announced that it considers COVID-19 epidemic and the decline in oil prices as events that have implications for profit rather than capital.

Source (Al-Arabiya.net website, Edited)

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