Net interest income for listed banks in the GCC reached a record quarterly level at $18.6 billion during the third quarter (Q3) of 2022 compared to $17.2 billion during Q2-2022, a report said.

The sequential increase was broad-based and was seen across the GCC, added Kuwait-based financial powerhouse Kamco Invest in its “GCC Banking Sector Report – Nov 2022”.

On the other hand, non-interest income dropped to a four-quarter low of $7.4 billion during Q3-2022 as compared to $7.8 billion during Q2-2022 reflecting a slide in global and regional financial markets during the quarter.

Aggregate lending in the GCC remained strong during the quarter. Central bank data showed Kuwaiti banks seeing double digit growth in outstanding credit facilities during the quarter while Saudi Arabia, Bahrain and Omani banks registered low single-digit growths.

The Credit survey from UAE central banks also showed strong lending during the quarter. On the other hand, the Qatari banking sector was an exception showing a marginal decline in lending during the quarter.

Data on listed banks also showed growth with aggregate GCC gross loans reaching a new record of $1.93 trillion, increasing by 1.2% or $23.5 billion during the quarter.

Outstanding net loan witnessed a slightly smaller growth of 1.1% during the quarter as a result of higher provisions booked during the quarter.

Aggregate q-o-q growth in customer deposits was at a six-quarter low of 1.0% to reach $2.19 Trillion at the end of Q3-2022. The q-o-q change in customer deposits remained mixed in the GCC during Q3-2022 with UAE and Saudi-listed banks showing q-o-q growth while aggregates for the rest of countries showed declines. The net impact of a larger lending growth and a slightly smaller customer deposit growth was a marginal growth of 10 bps in the aggregate GCC loan-to-deposit ratio at the end of Q3-2022.

Moreover, despite the growth, the ratio remained below the 80% level and at one of the lowest quarterly levels at 79.0%.

GCC banking sector balance sheet continued to strengthen during the quarter, although the growth rate slowed down to the lowest in six quarters. Aggregate assets reached a new record high level of $2.9 trillion after increasing by 1.2% during Q3-2022 as compared to Q2-2022. Conventional banks in the region witnessed a bigger total asset growth of 1.4% during Q3-2022, whereas growth for listed Islamic banks was slightly smaller at 0.4% as compared to Q2-2022. – TradeArabia News Service