Middle-east Arab News Opinion | Asharq Al-awsat

Saudi Banks Direct Risk Management to Amend Funding Portfolios’ Procedures - ASHARQ AL-AWSAT English Archive
Select Page

Jeddah-Risk management in Saudi banks has started boosting its measures against any possible risks, especially regarding repaying long-term loans.

Banks are facing challenges concerning funding portfolios that could not achieve balance since 50 percent of these long-term loans are given in exchange for short-term deposits, according to banking sources.

These sources also explained that financing operations may increase their impact, with the decline in oil prices, the revenues and deposits were affected, leading to widening the gap between supply and demand.

For his part, Secretary-general of the Media and Banking Awareness Committee of Saudi banks Talaat Hafez told Asharq Al-Awsat that in general the evaluation of funding portfolios in Saudi banks is very good, and it is being subjected to periodical evaluation by all banks to ensure the adequacy of doubtful money allocated for debts.

According to bankers, risk management in banks contribute effectively in the stability of financial firms, especially during financial crises that usually affect banking sectors around the world; thus, allowing it to increase the level of evaluation before issuing any decisions pertaining to lending.

Bankers also confirmed that banks face many challenges as they always are willing to lend money amidst more preservation in evaluation processes in order to limit risk factors.