"Standard & Poor's Global" agency revealed that the largest ability to absorb absolute credit losses among Gulf banks rests with Saudi banks due to their size, indicating that compared to total lending, the ability of Kuwaiti banks stands out due to their large allocations that have accumulated over the years. S&P agency issued a report under the title " How COVID-19 Is Affecting Bank Ratings: March 2021 Update ", in which it expected that the region's banks would spare more allocations in 2021, noting that it had conducted two simulations of credit losses that banks could absorb in the context of scenarios. The first focuses on the profitability of the banks and the excess allocations on the current non-performing loans, while the second simulation takes into account the buffers that exceed the limits of capital adjusted according to risk from the perspective of classification.
The agency also revealed that, based on the first simulation, the Kuwaiti banks are the most resilient thanks to the large allocations accumulated over the years, while Saudi and Qatari banks occupy the second and third ranks thanks to the strong profitability of banks in these two countries, while the UAE comes fourth due to the problems of asset quality that appeared in 2020, which reduced the banks' ability to absorb losses.
Source (Al-Rai Newspaper-Kuwait, Edited)
