GCC banks make quick recovery from impact of pandemic

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Dubai

Key indicators point to quick recovery of GCC’s banking sector from the impact of Covid-19 on asset quality and profitability.

According to an analysis of financial data of 59 listed banks in the GCC by Kuwait based Kamco Invest, barring a few, most GCC banks have witnessed remarkable recovery during Q1 2021 backed by economic growth seen across the region.

Profits reached $8.4 billion during Q1 2021, up 62 per cent year on year and 14.2 per cent sequentially. Out of 59 listed banks in the region, merely 6 reported a quarter on quarter decline in profits during last quarter while 17 banks reported a year on year decline.

“The improvement was mainly led by a 41 per cent or $2.5 billion quarter on quarter drop in loan loss provisions (LLP) that reached a six-quarter low level of $3.6 billion in Q1 2021.

This was partially offset by a decline in the topline as banks continue to deal with the low interest rate environment,” said Junaid Ansari, Head of Investment Strategy & Research at Kamco Invest.

At the country level, aggregate profits for banks in Kuwait, UAE and Bahrain more than doubled quarter on quarter, whereas Saudi Arabian banks reported a profit growth of 34 per cent.—Gulf News