Gulf Arab banks topped forecasts for second-quarter profit growth on Wednesday as a regional economic boom fuelled by high oil prices and low interest rates drove demand for credit. Governments and private investors are pouring billions of dollars into infrastructure, real estate and industry across the world's biggest oil-exporting region, giving banks massive financing opportunities in corporate and retail banking.
"We are seeing a liquidity boom in the UAE and Gulf region," said Raj Madha, a banking analyst at Cairo-based investment bank EFG-Hermes. "One of the biggest factors is oil, another is the amount of project financing."
Qatar National Bank, the largest lender in the world's biggest exporter of liquefied natural gas, posted a 71 percent surge in second-quarter profit. Abu Dhabi's second-biggest bank, First Gulf Bank, said quarterly earnings grew 70 percent, exceeding five forecasts by analysts in a Reuters net profit survey last month.
Gulf Arab banks - which have mostly avoided exposure to the US subprime mortgage crisis - cut interest rates in recent months as dollar pegs in all Gulf states but Kuwait compelled central banks to track seven US rate cuts since September.
Comments
Comments are closed.