The Gulf Cooperation Council’s banking sector profits recorded a 40 percent surge to hit $35 billion in 2021, a report by investment company Kamco said.
However, profits remain below pre-pandemic levels of $37 billion in 2019.
The surge in profits is mainly attributed to an increase in total bank revenue alongside a decline in loan loss provisions.
Also, the total bank revenues increase by 6.9 percent to reach a record $90 billion during the period.
This is mainly due to a growth of 17.6 percent in non-interest income as well as a minor additional growth of 2.3 percent in net interest income.
The loan loss provisions have plunged by over 25 percent to reach $14.9 billion in 2021, down from $20.4 billion in 2020.
Yet, loan loss provision levels remain higher when compared to the average of $9.1 billion in the ten years prior to the outbreak of the pandemic.
In the final quarter of 2021 alone, growth in lending slowed to a three-quarter low of 1.2 percent growth to reach $1.7 trillion.
Customer deposits too decelerated with a growth of 1.2 percent to reach $2 trillion.
Accordingly, the aggregate GCC banking sector’s loan to deposit ratio slipped 10 basis points to reach a level of 79.9 percent, reflecting a five-quarter low.