The Banking Executive Magazine - August 2021

GCC Banks GCC Banks POST RECORD HIGH LOANS GROWTH IN Q2 Listed banks in the GCC continued to post robust growth in lending ac- tivity during Q2-2021 resulting in record high loan books. Research by Kamco Invest shows ag- gregate gross loans at the end of the second quarter reached $1.68 tril- lion, up 4.6 per cent quarter-on-quar- ter (QoQ) and 7.1pc year-on-year (YoY), after a broad-based growth seen in all the markets. Analysing financials reported by 60 listed banks in the GCC for the quar- ter end Q2-2021, a report by the Kuwait-based firm said net loans also showed a similar growth of 4.8pc QoQ to $1.6trn, once again backed by growth in all the markets. Saudi Arabian banks reported the biggest QoQ increase in net loans during Q2-2021 with a hike of 13.1pc followed by Bahraini banks that clocked a growth rate of 3.4pc. The trend in customer deposits was also broadly positive in the GCC with five out of six countries record- ing a QoQ growth during Q2-2021. Aggregate customer deposits in- creased by 4.6pc QoQ and 6.1pc YoY to $2trn, a new record high for the GCC banking sector, with Bahraini banks reporting 6.2pc YoY increase in customer deposits. The aggregate loan-to-deposit ratio for the GCC banking sector remained above the 80pc mark at the end of Q2-2021 to 80.4pc, the highest in the last five quarters, but still below pre-Covid-19 levels. Total banking sector assets in the GCC continued to show growth reaching a new record high of $2.64trn, registering a growth of 4.7pc QoQ and 6.7pc YoY during Q2-2021. Loan loss provisions (LLP) showed mixed trends during Q2-2021 but the aggregate for the GCC banks in- creased by 12.3pc QoQ to $4.1 bil- lion as compared to $3.6bn during Q1-2021. the BANKING EXECUTIVE 16 ISSUE 152 AUGUST 2021