S&P: GCC Banks’ Plunging Profits and Dividends Could Spark New Wave of M&A amidst Pandemic

May 19, 2020

A report by S&P Global Ratings has highlighted the possibility of banks in the Gulf Cooperation Council region facing lower asset quality, with profitability taking a hit, as the region’s banking sector battles against the impacts of COVID-19, as well as lower oil prices.

Global Head of Islamic Finance at S&P Global Ratings (S&P), Mohamed Damak, states that banks within the Gulf Cooperation Council (GCC) region are well capitalized and can absorb up to USD 36 billion in extra provisions before their capital bases start to wear down. However, the more pressing issue at present is the expected deterioration in asset quality with non-performing loans predicted to double in 2020.