GCC Banks Report $2 Trillion in Loans: Kamco Invest Analysis

Kuwait, 27 April, 2024 : Kamco Invest reveals that outstanding credit facilities for GCC banks surged by 2.1% quarter-on-quarter in Q4-2023, totaling $2 trillion in aggregate gross loans. Year-on-year growth was even more robust at 7.0%. This growth trend, seen across all GCC countries, reflects a thriving projects market with governments increasingly resorting to debt issuances for funding support.

Simultaneously, customer deposits rose by 2.1% quarter-on-quarter, reaching $2.39 trillion by the end of Q4-2023. This growth was widespread across GCC markets. Despite the increase in both lending and deposits, the aggregate loan-to-deposit ratio for GCC banks marginally improved to 79.2%.

In Q4-2023, total net income for the GCC banking sector surged to $14.2 billion, marking a 2.4% quarter-on-quarter increase. This growth was supported by higher net interest income, fueled by elevated interest rates, and non-interest income, buoyed by robust financial markets.

Kamco predicts a largely positive outlook for GCC banks, driven by resilient lending across markets and favorable oil prices. Any anticipated rate cuts in the year ahead are expected to further ease funding costs and boost lending activity. However, forecasts from the US Federal Reserve indicate a more conservative stance on rate cuts, potentially diverging from other major economies.

Source : www.zawya.com