Moody's credit rating agency granted a stable outlook for the Saudi banking sector, expecting a growth between 4% and 5% in the loans’ portfolio this year.
The agency announced that the quality of assets in Saudi Arabia is improving overall, but there is some weakness in certain sectors such as construction, revealing that the number of doubtful loans in certain sectors such as construction would rise during the year 2019.
Moody’s said that Saudi Arabia will witness a slight growth in the volume of loans supported by the increased government spending, indicating that the non-oil sector is one of the most important foundations of support for the banking sector in Saudi Arabia.
In a separate context, the agency showed that the strong competition and declining growth rates has led the Gulf banks into integration, which is considered a positive step for the sector's profitability, expecting new mergers in the Gulf banking sector this year.
The agency also expected the instruments’ issuance this year to be between $120 billion and $130 billion, indicating that the reason behind the instruments’ issuances rise is the drop in oil prices, clarifying that the instruments’ issuance of last year increased by 5% to reach $119 billion.
Source: (Al-Arabiya.net, Edited)
