Saudi Banks Seen as Gulf’s Most Vulnerable in Oil-Price War

Saudi Arabian banks may pay the biggest price among their regional peers as the kingdom escalates an oil-price war, Bloomberg News reported. Lenders in the world’s largest oil exporter, already dealing with a fragile economy, now have to contend with plummeting crude prices -- which could lead to more problem loans -- and the fallout of the coronavirus that’s closed the kingdom’s schools and limited cross border movement. A surprise interest rate cut last week also means profit margins are under pressure. “Sustained lower oil prices would undoubtedly impact the private sector and lead to a pick-up in delinquencies,” said Chiro Ghosh, an analyst at investment bank SICO BSC in Bahrain. Saudi banks with a high share of corporate loans “are at greater risk” so will “focus more on mortgage loans to protect their margin.” Read more