Middle-east Arab News Opinion | Asharq Al-awsat

Saudi banks protected against bad loans - c.bank - ASHARQ AL-AWSAT English Archive
Select Page

RIYADH, (Reuters) – Saudi banks have taken enough measures against bad loans and are poised for growth as lending in the world’s top oil exporter will accelerate this year, the Gulf Arab kingdom’s central bank governor said on Wednesday.

Most banks in the biggest Arab economy have posted upbeat fourth-quarter results, with several above analysts’ average forecasts, after booking provisions in the third quarter. However, credit growth in the kingdom remains in single digits.

“It’s clear that when bad loans go down, then provisions go down as well so banks undertook less … in the fourth quarter,” Muhammad al-Jasser told Saudi-owned Al Arabiya television.

“They have taken enough… to tackle any situation now,” he said, adding that he saw no need for “big” provisions.

Saudi banks are set to expand this year and credit growth would accelerate beyond 5 percent achieved last year, Jasser said.

“Lending will grow and accelerate,” he said, without giving figures.

Jasser, who said in October provisions for bad loans in the OPEC member should exceed 100 percent of their value, declined to say whether provisions would fall in 2011.

“The provisions put Saudi banks in a very strong position,” he said.

The Saudi banking sector had been hit by debt restructuring in family-owned businesses in the past.

As a result, lending growth stalled in December 2009 but it has been picking up slowly over the past few months with the pace well below over 20 percent rates seen at the beginning of 2009.

Most Saudi banks exceeded average analyst forecast with net profit in the fourth quarter, among them HSBC affiliate SABB and Banque Saudi Fransi, part-owned by France’s Calyon.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

More Posts

Follow Me:
FacebookGoogle PlusYouTube