S&P Sees ‘Start of a New Era’ for Gulf Banks as Oil Wealth Ebbs
- Lenders face ‘longer lasting’ period of lower profitability
- Saudi lending growth to slow but may still outpace Gulf peers
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Gulf banks are entering an age of weaker profits as a result of the coronavirus outbreak and a decline in crude prices, according to S&P Global Ratings.
“The pandemic and drop in oil prices could mark the start of a new era,” S&P analysts led by Mohamed Damak in Dubai said in a report. “This new era is characterized by a decline in oil wealth, a lower multiplier effect in the local economies, and lower profitability.”