In the video shared by the Abu Dhabi Police, speeding cars are seen crashing into vehicles as traffic builds up unexpectedly
Business confidence in the GCC recorded an upswing in the first quarter on the back of solid economic recovery and demand growth as governments across the region stepped up investment plans thanks to additional oil earnings.
Investment in businesses received a fillip from the loose fiscal policies of 2021 across the region and globally that were implemented with an aim to boost investments, Kamco Invest said in its GCC Banking Sector Report for Q1.
The rising business optimism and robust investment were reflected in the GCC banking sector net profits that showed one of the strongest quarter-on-quarter growth rates in the first quarter at 25.1 per cent to reach one of the highest quarterly levels at $10.9 billion as compared to $8.7 billion during Q4-2021. The year-on-year growth was also strong at 30.7 per cent. The UAE banks recorded a first quarter growth of 27.1 per cent, Kamco report said.
Economic growth showed a better-than-expected recovery in 2022 mainly backed by elevated oil prices and higher volumes that enabled governments to increase investment in the economy.
“The IMF highlighted this while upgrading its 2022 real GDP forecast for Saudi Arabia by 280 bps and for GCC by 220 bps to 7.6 per cent and 6.4 per cent, respectively. GCC oil GDP is expected to grow by 10.1 per cent during the year while non-oil GDP is expected to grow at 3.9 per cent."
Moreover, recent economic data has shown 9.9 per cent y-o-y GDP growth rate for Saudi Arabia in Q1-2022, the highest since 2011, with expectations of sustained activity by the end of the year.
Consensus estimates show GCC real GDP growth of 6.0 per cent this year, one of the highest over several years. In addition, inflation in the region remained significantly below the record levels seen in the US and Europe. The increase in consumer prices ranged between 1.6 per cent and 4.3 per cent during Q1-2022. The overall activity was also reflected in the PMI surveys for the region.
Data showed that manufacturing activity remained well above the growth mark with PMI figures of over 50 for Saudi Arabia, UAE, Dubai and Qatar during Q1-2022.
Data from GCC central banks’ monthly publications also showed growth in credit disbursements in Kuwait, Saudi Arabia, Qatar, Bahrain and Oman. Lending activity remained robust during Q1-2022 resulting in record high loan books at the end of the quarter.
Gross loans reached $1.8 trillion, up 2.1 per cent q-o-q and 10.1 per cent y-o-y, mainly led by strong growth in Saudi Arabia and the UAE that was partially offset by a decline in gross loans mainly by Omani and Bahraini listed banks. Net loans showed a slightly higher growth of 2.5 per cent q-o-q to reach $1.68 trillion, backed by growth in all markets,
Aggregate return on equity (ROE) for the GCC banking sector continued to show improvement during Q1-2022 reaching an 8-quarter high level of 10.8 per cent as compared to 10.4 per cent at the end of Q4-2021. However, the ratio remained relatively low as compared to pre-pandemic levels of over 12 per cent.
Total banking sector provisions dropped by a quarter to $2.9 billion during Q1-2022 as compared to $3.8 billion in Q4-2021, whereas the y-o-y decline came in at 21.4 per cent. All countries in the GCC reported a double-digit q-o-q drop in provisions during Q1 -2022 barring Kuwaiti banks that reported a marginal increase of 0.6 per cent.
— issacjohn@khaleejtimes.com
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