Pandemic costs GCC banks $10.9 bln in new provisions
Published 21 Mar,2021 via Muscat Daily - Over the past 12 months, the GCC banks have set aside US$10.9bn of additional loan-loss provisions for the expected negative impact of the COVID-19 pandemic and drop in oil prices on their economies, S&P Global Ratings said on Sunday.
The global ratings agency expects more provisions at GCC banks in 2021 as regulatory forbearance measures are lifted by the regulators and banks recognise the full impact of the shock.
Despite the regulatory forbearance measures, which allowed banks to smoothen the profitability hit, cost of risk for rated banks increased by almost two-thirds – reaching 150 basis points (bps) at year-end 2020 compared with 90 bps at year-end 2019, S&P Global Ratings said in a report.
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