GCC banks’ loan books hit record high of $1.68 trillion
The banks in the GCC continued to post robust growth in lending activity, as the economic recovery gathered pace during the second quarter, resulting in a record high loan books of $1.68 trillion, Khaleej Times quoted analysts at an investment bank, as saying.
Gross loans of listed banks in the GCC at the end of the quarter jumped 4.6 per cent QoQ and 7.1 per cent YoY, after a broad-based growth seen in all the markets, analysts at Kamco Invest said in their GCC Banking Report.
The total revenue for the GCC banks increased 3.5 per cent on QoQ during the second quarter of 2021 after seeing a decline during the previous quarter. The increase in the second quarter of 2021 was mainly led by higher net interest income that was partially offset by a decline in the non-interest income.
The banks in the UAE continued to account for the biggest share of the regional banking balance-sheet with the total assets of $840 billion. They were followed by Saudi Arabian banks at $771 billion, or 26.7 per cent of the aggregate.
The gross credit extended by the banks in the UAE witnessed a marginal growth of 0.9 per cent during the second quarter of 2021 after showing declines of 1.4 per cent during the previous two quarters.
The total gross credit stood at Dh1.77 trillion at the end of the second quarter of 2021, based on preliminary numbers, slightly higher than the pre-pandemic gross credit of Dh1.76 trillion at the end of 2019.
The banks based in the UAE reported the biggest increase in profits during the second quarter, registering a growth of 11.8 per cent after nine of the 16 listed banks in the UAE reported an increase in net profits.
The First Abu Dhabi Bank reported the biggest absolute growth in profits that reached $783.7 million in the second quarter of 2021, compared with $674 million in the first quarter of 2021.
ADCB and the Dubai Islamic Bank followed in terms of absolute profit growth, registering increases of 25.1 per cent and 19.3 per cent QoQ, respectively.
The Bank of Sharjah continued to report a loss during the quarter that reached $93.9 million in the second quarter of 2021.
Across the GCC, net loans of the banks recorded a similar growth of 4.8 per cent QoQ to reach $1.6 trillion, once again backed by growth in all the markets.
“Faster economic activity was evident in the PMI figures for the UAE and Saudi Arabia that remained elevated during May and June 2021, well above the growth mark of 50. The customer deposits also showed a growth in almost all the markets during the quarter,” the report added.
The customer deposits increased 4.6 per cent during the quarter to reach $2 trillion, a new record high for the GCC banking sector, compared with $1.9 trillion at the end of the first quarter of 2021.
The Saudi Arabian banks reported the biggest sequential growth in the customer deposits, while the Qatari banks’ customer deposits remained almost flat with a marginal decline of 0.1 per cent. The aggregate loan-to-deposit ratio for the sector improved slightly QoQ by 20bps to 80.4 per cent, the highest in the last five quarters, but still below the pre-Covid-19 levels.
The total banking sector assets in the GCC continued to show a growth, reaching a new record high of $2.64 trillion, registering a growth of 4.7 per cent QoQ and 6.7 per cent YoY during the second quarter of 2021.
“Growth was seen in most markets in the GCC barring Qatari banks that reported a marginal QoQ decline of 0.5 per cent,” the Kamco report added.
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