GCC Banks Financial Stability

by Forbes Middle East Forbes Middle East - Business News

Banks in the Gulf Cooperation Council (GCC) are expected to see more stabilization in financial profiles and performance in 2018, according to ratings firm S & P Global Ratings.

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Review on GCC Banks Financial Stability

This stabilization is anticipated to occur during the second half of 2018, barring unforeseen economic and political events and geopolitical risk. In their Industry Report Card, S & P Global Ratings stated that the GCC banks profitability is expected to stabilize as well, however, it will be at a lower level than previously documented.
This is also grounded in an increased cost of risk caused by a promotion of new accounting standards in banks and the introduction of value added tax, which some banks plan to pass on to clients. In addition to an increased cost of risk, mutual loan growth also poses a threat to the expected balance in profitability and financial performance.