March 13 (Reuters) – The outlook for Saudi Arabia’s banking system is stable as the kingdom’s economy returns to growth this year, boosted by an increase in public spending and other incentives, Moody’s Investors Service said in a report published on Tuesday.
The profitability of Saudi banks will remain the highest among the GCC countries, the report said. Moody’s expects margins to rise as interest rates rise, credit growth grows, fee income rises and operating costs fall, which will cover an increase in provisions. Moody’s said stable profitability and moderate loan growth would boost the already strong capital adequacy of Saudi banks.
(Prepared by Wagdy Al-Alfi for the Arabic publication)