The international credit and rating agency Standard and Poors revealed that Gulf banks have a strong ability to avoid the economic shock caused by the outbreak of the Coronavirus pandemic, thanks to the abundant supply of cash reserves, which they have succeeded in building over the past years.
According to the agency, the banks of the Gulf region are able to absorb losses in the new credit, which may amount to $36 billion before the start of the exhaustion of capital bases, which places them in a strong position enabling them to face the adverse economic winds caused by the Corona crisis. Gulf banks are also highly profitable by supporting large proportions of non-interest bearing deposits and sustainable sources of revenue coupled with high operating efficiency.
The agency indicated that the banking sector in the Gulf region is also capable of absorbing financial shocks estimated at 2.7 times the size of the average annual credit losses, as it has abundant cash reserves that will help it cope with the economic repercussions of the Corona outbreak.
According to the agency "Standard & Pros", Saudi banks are the most flexible among their Gulf counterparts in terms of their ability to absorb the shock of Corona.
Source (Youm7 Website, Edited)
