GCC Islamic Banks to be Impacted Less by COVID-19 than Their Conventional Counterparts

According to Kuwait-based, Kamco-Invest (KI), the top-and bottom-lines of Islamic banks within the Gulf Cooperation Council (GCC) region are likely to be less affected by the impacts of COVID-19 compared to conventional lenders in the region.

Given that the conventional banks in the GCC have experienced higher growth rates at over 10% in assets and deposits in 2019 (compared to Islamic banks in the GCC which saw assets and deposits grow at around 8% in 2019), KI expects the pandemic to impact the conventional banks to a greater extent in the near term.

KI stated that the higher loan-to-deposit ratios of Islamic banks in the region indicate a lower impact on profitability compared to...