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(P)GCC Banks Face Business Risks

(P)GCC Banks  Face Business Risks(P)GCC Banks  Face Business Risks

A number of (Persian) Gulf Cooperation Council banks that have exposure to Turkey will be impacted by the sharp decline in lira in terms of their earnings and asset quality, according to banking sector analysts, AFP reported. According to a research note from Shuaa Capital, amongst the (P)GCC banks, Qatar National Bank, Commercial Bank of Qatar, Burgan Bank, Kuwait Financial House will have significant impact on earnings on the back of the lira’s depreciation. KFH and Burgan bank have sizeable lending exposure with 30% and 25% of total group loans respectively to Turkish subsidiaries, while Qatari lenders such as QNB and CBQ have 13% and 15% of loans to Turkey. As for the earnings, Turkey contributes 19% and 18% of earnings for KFH and Burgan respectively and 14% and 8% of earnings for QNB and CBQ respectively. Meanwhile in Saudi Arabia, NCB has exposure to Turkey via a 67% stake in Turkiye Finansbank, but the impact is not known at present.

 

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