Banks in the Gulf Co-operation Council area will benefit from a regional economic recovery this year, according to S&P Global Ratings.
Higher oil prices, supportive government spending and normalising non-oil activity will boost regional banks’ growth, the ratings agency said in its latest report GCC Banking Sector Outlook: On the Recovery Path in 2022 released on Tuesday.
Strong capitalisation and government support will continue to reinforce lenders’ creditworthiness, it said.
The ratings agency, which expects Brent crude's price to average $65 a barrel this year, said improving economic sentiment and higher hydrocarbon production should lead to accelerated economic growth.
“We expect banks’ asset quality indicators to deteriorate only slightly as regulatory forbearance measures have helped the corporate sector to deal with the negative effects of the pandemic," S&P Global Ratings credit analyst Mohamed Damak said.
Like their global peers, GCC banks faced tougher operating conditions as the pandemic disrupted economic momentum. However, the regional economies, especially the UAE and Saudi Arabia, the Arab world’s biggest economies, bounced back strongly on the back of mass inoculation programmes and fiscal measures.
The GCC banks are also positively geared to the rising interest rates, the New York-based agency said.
In a tight job market, accelerated inflation readings over the past few months and increasingly hawkish forward guidance from the US Federal Reserve, S&P expects three rate rises in 2022, with the first in May.
“This will prompt a similar reaction from GCC central banks given their currency pegs … [however] banks will benefit from such an increase assuming no material impact on asset quality,” Mr Damak said.
"On average, a 100-basis-point increase in rates would result in a 14 per cent increase in earnings and 1 per cent capital accretion … we do not expect a major slowdown in lending growth following a rate increase as this is more dependent on government spending and oil prices.”
The Fed is quickening the pace at which it is pulling back its support for the post-pandemic US economy as inflation surges. It expects to raise interest rates to deal with inflation, which it had earlier characterised as mainly a “transitory” problem.
Currencies of Gulf states, with the exception of Kuwait, are tied to US dollar, and central banks in the region usually mimic the Fed’s interest rate moves. A rise in lending rates in the region will help banks improve their net interest margins and profitability.
The ratings agency said lower global liquidity is likely to have a limited impact on GCC banks because of their “strong net external asset positions or limited net external debt positions”.
Banks’ efficiency, facilitated by low cost of labour and limited taxation, will continue to support profitability, S&P said.
In a separate report this week, Egyptian investment bank EFG Hermes said major banks in the Middle East and North Africa are expected to post a 29 per cent annual increase in their aggregate fourth-quarter income amid continued economic recovery.
Our commentary on Brexit
- Con Coughlin: Choice of the British people will be vindicated
- Sam Williams: Departure is influenced by its sense of place
The%20specs
COMPANY%20PROFILE
On Women's Day
Dr Nawal Al-Hosany: Why more women should be on the frontlines of climate action
Shelina Janmohamed: Why shouldn't a spouse be compensated fairly for housework?
Samar Elmnhrawy: How companies in the Middle East can catch up on gender equality
Justin Thomas: Challenge the notion that 'men are from Mars, women are from Venus'
On Women's Day
Dr Nawal Al-Hosany: Why more women should be on the frontlines of climate action
Samar Elmnhrawy: How companies in the Middle East can catch up on gender equality
The National Editorial: Is there much to celebrate on International Women's Day 2021?
Justin Thomas: Challenge the notion that 'men are from Mars, women are from Venus'
Mohammed bin Zayed Majlis
Not Dark Yet
Shelby Lynne and Allison Moorer
Four stars
On Women's Day
Dr Nawal Al-Hosany: Why more women should be on the frontlines of climate action
Shelina Janmohamed: Why shouldn't a spouse be compensated fairly for housework?
Samar Elmnhrawy: How companies in the Middle East can catch up on gender equality
The National Editorial: Is there much to celebrate on International Women's Day 2021?
Tomorrow 2021
KILLING OF QASSEM SULEIMANI
National Editorial: Suleimani has been killed, now we must de-escalate
Mina Al Oraibi: Air strike casts a long shadow over the decade ahead
Jack Moore: Why the assassination is such a monumental gamble
Matthew Levitt: Iran retains its ability to launch terror attacks
Damien McElroy: A CEO tasked with spreading Iran's influence
Hussein Ibish: Trump's order on solid constitutional ground
Simon Waldman: Cautious Israel keeping a low profile
Rashmee Roshan Lall: Sound of silence in South Asia
Richard Olson: Why Afghanistan will be very wary
Our commentary on Brexit
- Alistair Burt: Despite Brexit, Britain can remain a world power
- Con Coughlin: Choice of the British people will be vindicated
Plastic tipping points
While you're here
Barings Bank
Barings, one of Britain’s oldest investment banks, was
founded in 1762 and operated for 233 years before it went bust after a trading
scandal.
Barings Bank collapsed in February 1995 following colossal
losses caused by rogue trader Nick Lesson.
Leeson gambled more than $1 billion in speculative trades,
wiping out the venerable merchant bank’s cash reserves.
Evacuations to France hit by controversy
- Over 500 Gazans have been evacuated to France since November 2023
- Evacuations were paused after a student already in France posted anti-Semitic content and was subsequently expelled to Qatar
- The Foreign Ministry launched a review to determine how authorities failed to detect the posts before her entry
- Artists and researchers fall under a programme called Pause that began in 2017
- It has benefited more than 700 people from 44 countries, including Syria, Turkey, Iran, and Sudan
- Since the start of the Gaza war, it has also included 45 Gazan beneficiaries
- Unlike students, they are allowed to bring their families to France
The specs
Engine: 6.2-litre V8
Transmission: ten-speed
Power: 420bhp
Torque: 624Nm
Price: Dh325,125
On sale: Now
While you're here
Kareem Shaheen: Even a pandemic could not unite today's America
Michele Wucker: The difference between a black swan and a grey rhino
Robert Matthews: Has flawed science and rushed research failed us?
UAE players with central contracts
Rohan Mustafa, Ashfaq Ahmed, Chirag Suri, Rameez Shahzad, Shaiman Anwar, Adnan Mufti, Mohammed Usman, Ghulam Shabbir, Ahmed Raza, Qadeer Ahmed, Amir Hayat, Mohammed Naveed and Imran Haider.
On Women's Day
Dr Nawal Al-Hosany: Why more women should be on the frontlines of climate action
Shelina Janmohamed: Why shouldn't a spouse be compensated fairly for housework?
Justin Thomas: Challenge the notion that 'men are from Mars, women are from Venus'
The National Editorial: Is there much to celebrate on International Women's Day 2021?
Profile Idealz
Company: Idealz
Founded: January 2018
Based: Dubai
Sector: E-commerce
Size: (employees): 22
Investors: Co-founders and Venture Partners (9 per cent)
More from this package
THE BIO
Favourite book: ‘Purpose Driven Life’ by Rick Warren
Favourite travel destination: Switzerland
Hobbies: Travelling and following motivational speeches and speakers
Favourite place in UAE: Dubai Museum
On Women's Day
Shelina Janmohamed: Why shouldn't a spouse be compensated fairly for housework?
Samar Elmnhrawy: How companies in the Middle East can catch up on gender equality
The National Editorial: Is there much to celebrate on International Women's Day 2021?
Justin Thomas: Challenge the notion that 'men are from Mars, women are from Venus'
Mohammed bin Zayed Majlis
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The%20specs%20
UAE%20athletes%20heading%20to%20Paris%202024
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
PROFILE OF INVYGO
Started: 2018
Founders: Eslam Hussein and Pulkit Ganjoo
Based: Dubai
Sector: Transport
Size: 9 employees
Investment: $1,275,000
Investors: Class 5 Global, Equitrust, Gulf Islamic Investments, Kairos K50 and William Zeqiri
Points classification after Stage 4
1. Arnaud Demare (France / FDJ) 124
2. Marcel Kittel (Germany / Quick-Step) 81
3. Michael Matthews (Australia / Sunweb) 66
4. Andre Greipel (Germany / Lotto) 63
5. Alexander Kristoff (Norway / Katusha) 43
The specs: 2018 Mitsubishi Eclipse Cross
Price, base / as tested: Dh101,140 / Dh113,800
Engine: Turbocharged 1.5-litre four-cylinder
Power: 148hp @ 5,500rpm
Torque: 250Nm @ 2,000rpm
Transmission: Eight-speed CVT
Fuel consumption, combined: 7.0L / 100km
SPEC%20SHEET%3A%20NOTHING%20PHONE%20(2)
Empires%20of%20the%20Steppes%3A%20A%20History%20of%20the%20Nomadic%20Tribes%20Who%20Shaped%20Civilization
The specs
Engine: 1.5-litre 4-cyl turbo
Power: 194hp at 5,600rpm
Torque: 275Nm from 2,000-4,000rpm
Transmission: 6-speed auto
Price: from Dh155,000
On sale: now
Plastic tipping points
Tomorrow 2021
Tottenham's 10 biggest transfers (according to transfermarkt.com):
1). Moussa Sissokho - Newcastle United - £30 million (Dh143m): Flop
2). Roberto Soldado - Valencia - £25m: Flop
3). Erik Lamela - Roma - £25m: Jury still out
4). Son Heung-min - Bayer Leverkusen - £25m: Success
5). Darren Bent - Charlton Athletic - £21m: Flop
6). Vincent Janssen - AZ Alkmaar - £18m: Flop
7). David Bentley - Blackburn Rovers - £18m: Flop
8). Luka Modric - Dynamo Zagreb - £17m: Success
9). Paulinho - Corinthians - £16m: Flop
10). Mousa Dembele - Fulham - £16m: Success
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The specs
Engine: 4.0-litre V8 twin-turbocharged and three electric motors
Power: Combined output 920hp
Torque: 730Nm at 4,000-7,000rpm
Transmission: 8-speed dual-clutch automatic
Fuel consumption: 11.2L/100km
On sale: Now, deliveries expected later in 2025
Price: expected to start at Dh1,432,000
The five pillars of Islam
1.
2.
3.
4.
5.
New process leads to panic among jobseekers
As a UAE-based travel agent who processes tourist visas from the Philippines, Jennifer Pacia Gado is fielding a lot of calls from concerned travellers just now. And they are all asking the same question.
“My clients are mostly Filipinos, and they [all want to know] about good conduct certificates,” says the 34-year-old Filipina, who has lived in the UAE for five years.
Ms Gado contacted the Philippines Embassy to get more information on the certificate so she can share it with her clients. She says many are worried about the process and associated costs – which could be as high as Dh500 to obtain and attest a good conduct certificate from the Philippines for jobseekers already living in the UAE.
“They are worried about this because when they arrive here without the NBI [National Bureau of Investigation] clearance, it is a hassle because it takes time,” she says.
“They need to go first to the embassy to apply for the application of the NBI clearance. After that they have go to the police station [in the UAE] for the fingerprints. And then they will apply for the special power of attorney so that someone can finish the process in the Philippines. So it is a long process and more expensive if you are doing it from here.”
While you're here
While you're here
Gavin Esler: Coronavirus offers stinging rebuke to protectionists
Kareem Shaheen: Pandemics can save us from waging wars
Sholto Byrnes: Why the climate change clash will get nastier
Company profile
Company name: Dharma
Date started: 2018
Founders: Charaf El Mansouri, Nisma Benani, Leah Howe
Based: Abu Dhabi
Sector: TravelTech
Funding stage: Pre-series A
Investors: Convivialite Ventures, BY Partners, Shorooq Partners, L& Ventures, Flat6Labs
Killing of Qassem Suleimani
National Editorial: Suleimani has been killed, now we must de-escalate
Mina Al Oraibi: Air strike casts a long shadow over the decade ahead
Matthew Levitt: Iran retains its ability to launch terror attacks
Damien McElroy: A CEO tasked with spreading Iran's influence
Hussein Ibish: Trump's order on solid constitutional ground
Simon Waldman: Cautious Israel keeping a low profile
World Mental Health Day
Dhadak 2
Director: Shazia Iqbal
Starring: Siddhant Chaturvedi, Triptii Dimri
Rating: 1/5
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part three: the age of the electric vehicle begins
Read part two: how climate change drove the race for an alternative
Read part one: how cars came to the UAE
Mohammed bin Zayed Majlis
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
Read part three: the age of the electric vehicle begins
Read part two: how climate change drove the race for an alternative
MORE ON CORONAVIRUS
Editorial: Coronavirus-stricken communities need solidarity
Dominic Jermey: How epidemics like coronavirus can be caused by the illegal wildlife trade
Sholto Byrnes: Fake news about coronavirus is infecting the world
Company%C2%A0profile
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
Read part three: the age of the electric vehicle begins
Read part one: how cars came to the UAE
War on waste
The Indo-Pacific
Rashmee Roshan Lall: US-India chemistry can no longer be dismissed
Brahma Chellaney: South China Sea has become Asean's Achilles heel
Brahma Chellaney: Trump's unpredictability is making China great again
Ukraine%20exports
Cricket World Cup League 2
UAE squad
Rahul Chopra (captain), Aayan Afzal Khan, Ali Naseer, Aryansh Sharma, Basil Hameed, Dhruv Parashar, Junaid Siddique, Muhammad Farooq, Muhammad Jawadullah, Muhammad Waseem, Omid Rahman, Rahul Bhatia, Tanish Suri, Vishnu Sukumaran, Vriitya Aravind
Fixtures
Friday, November 1 – Oman v UAE
Sunday, November 3 – UAE v Netherlands
Thursday, November 7 – UAE v Oman
Saturday, November 9 – Netherlands v UAE
Disturbing%20facts%20and%20figures
While you're here...
Dust and sand storms compared
Sand storm
- Particle size: Larger, heavier sand grains
- Visibility: Often dramatic with thick "walls" of sand
- Duration: Short-lived, typically localised
- Travel distance: Limited
- Source: Open desert areas with strong winds
Dust storm
- Particle size: Much finer, lightweight particles
- Visibility: Hazy skies but less intense
- Duration: Can linger for days
- Travel distance: Long-range, up to thousands of kilometres
- Source: Can be carried from distant regions
While you're here
Nasser bin Nasser: Is US-China conflict in West Asia inevitable?
Sholto Byrnes: Time for an uninhibited China to lead Asia
Damien McElroy: BRI has changed the rules of the game
