科威特资产管理和金融服务公司（Kamco Invest）：2023年第二季度海合会银行业报告

JunaidAnsari

HeadofInvestmentStrategy&Research

+(965)22336912

jansari@

InvestmentStrategy&Research

GCCBankingSectorReport-Q2-2023August-2023

ResilientlendinggrowthintheGCCdespitedecadeshighrates…

TheGCCbankingsectorwitnessedcontinuedgrowthinlendingduringQ2-2023despiteinterestratesreachingdecades-highlevelsfollowingratehikesintheUS.AggregateoutstandingcreditfacilitiesinalmostallthecountriesintheGCCshowedsequentialgrowthduringthequartermainlyledbyarobustprojectsmarketpipelineaswellasgovernmenteffortstoreducetheimpactofhigherinterestrates.Moreover,severalnewbig-ticketprojectsandreforminitiativeswereannouncedintheGCCgivingfurtherboosttocorporatelending.

AggregategrossloansforGCC-listedbanksreachedanewrecordhighofUSD1.9TrillionattheendofQ2-2023.Theq-o-qgrowthstoodat1.9%orUSD36.3BnbackedbygrowthinallmarketsintheGCC.Similarly,aggregatenetloansshowedaslightlysmallergrowthof1.7%duringthequartertoreachUSD1.8Trillion.Ontheliquidityfront,customerdepositsincreasedatasmallerrateof1.0%q-o-qtoreachUSD2.3TrillionafteradeclineincustomerdepositsinQatarandKuwaitwasmorethanoffsetbyhigherdepositsintherestofthemarkets.Thenetimpactoffastergrowthingrossloansvs.customerdepositswasaslightgrowthintheaggregateloan-to-depositratiofortheGCCthatreached79.0%attheendofQ2-2023.

TotalnetincomereachedUSD13.7Bnwithaq-o-qincreaseof3.5%supportedbybothhighernetinterestincomeandnon-interestincomeduringthequarter.Higherinterestratessupportednetinterestincomeduringthequarter.AdeclineinloanlossprovisionsfromUSD3.0BntoUSD2.7Bnalsosupportedbottom-lineperformance.

Meanwhile,risinginterestrateshadatwinimpactonbanksglobally.Ononehand,higherinterestratesaffectedlending,especiallyinthemortgagemarketandatthesametimehigherinterestratesaffectedbanks’bondholdingvalueresultinginfailureofsomebanksintheUSandEuropeasinvestorsbecamealert.However,differencesineconomicfundamentalsalsoplayedaroleindelineatingdifferingimpactsinthewestvs.Asianmarkets.Asia’stwobiggesteconomies,IndiaandChina,followedadifferentpath.India’scentralbanksmorerecentlypausedratehikestoavoideconomicslowdownwhileChinaimplementedratecutsasseveralsectorswitnessedasevereslowdownincludingrealestate.

GCCBankingSector|Loan-to-DepositRatio(%)

GCCBankingSector|NetInterestMargin(%)

80.4%

80.5%

80.1%

79.9%

79.3%

79.0%

78.9%

79.0%

78.4%

3.23%

3.44%

2.76%

3.05%2.87%3.03%

3.18%

Kuwait

Saudi

Arabia

UAEQatarBahrainOman

GCC

Aggregate

Q2-21Q3-21Q4-21Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23

GCCBankingSector|TotalAssets(USDBn)ConventionalIslamic

GCCBankingSector|Cost-to-IncomeRatio(%)

2,6292,6812,7202,7662,8472,880

685700728748

1,9441,9801,9922,0192,0792,1092,0982,1562,186

2,9393,0073,054

768771841

851869

39.8%

39.8%39.8%

39.4%

39.4%

39.1%

39.1%

39.3%

38.9%

Q2-21Q3-21Q4-21Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23

Q2-21Q3-21Q4-21Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23

Source:Reuters,CompanyFinancials,KamcoInvestResearch

InvestmentStrategy&Research,KamcoInvest,15thFloor,Al-ShaheedTower,KhalidBinAl-WaleedStreet-Sharq,P.O.BOX:28873,Safat13149,KuwaitTel.:(+965)22336600Fax:(+965)22492395Email:kamcoird@Website:

InvestmentStrategy&Research

GCCBankingSectorReport

2

Highlights-GCCBankingSector

Thisreportanalyzesfinancialsreportedby58listedbanksintheGCCforthequarterendedQ2-2023.Dataforindividualbankshavebeenaggregatedtothecountrylevel.SomeofthekeyobservationsfromthemostrecentfinancialquarterfortheGCCBankingSectorincludesthefollowing:

Divergingcentralbankpoliciesacrosstheglobe…

TheUSFed

implementedthefirst

ratepauseafter10

consecutiveratehikes

duringitsJune-2023

meetingsendingastrong

signalacrosstheglobe

thatthepolicyisturning

slightlydovish.However,

initsmostrecent

meeting,theUSFed

onceagainimplemented

a25bpshikeraisingthe

ratetothehighestlevel

inmorethan22yearstoanewrangeof5.25%-5.50%.ThehikeindicatedthattheFedprioritizesbringingdowninflationtoatargetof2%despiteitsspillovereffectsontheUSeconomyaswellasinternationally.ThemostrecentinflationreadingintheUScameinat3.2%y-o-yduringJuly-2023withafirstyearlyincreaseafter12monthsofconsecutivepricedeclines.ArecentReuterspollshowedthatamajorityoftheeconomistssurveyedbelievethattheUSFedisdoneraisingratesbutmaykeeptherateshigherforlongerasindicatorslikelabormarketandspendingremaintight.ConsensusnowshowstheFedmayimplementitsfirstratehikenextyearafterMarch-2024.However,thefuturecourseofactionwoulddependonupcomingdataongrowthandinflation.

Ontheglobalfront,however,confidenceineconomicgrowthmaybeslumping,especiallyinthecaseofChinaasregulatorsmakeeffortstostoptheslideinfinancialmarketsamidaslowingeconomy.ThecentralbankinChinaimplementedanunexpectedratecutinabidtosupporteconomyafterseeingarealestatemarketcrisiscoupledwithdecliningconsumerdemand.Meanwhile,India’scentralbankkeptreporateunchangedat6.5%sinceearlyApril-2023butwithrisinginflationasseeninrecentmonths,pressurecontinuestobuildfortheregulators.FortheEU,theratehikespreeisexpectedtocontinueinSeptember-2023,basedonconsensusestimates,andthereaftertheregulatorsareexpectedtopausewithaneyeoninflationandeconomicfundamentals.

IntheGCC,centralbankslargelyfollowedFed’sfootstepsinhikingrates,barringBahrain’scentralbankthathaskeptratesstableat7%sinceMay-2023.ThecentralbankofKuwaitalsoincreasedthediscountrateby25bpsto4.25%inJuly-2023afteralongpauseofalmostsixmonthssincethehikeinJanuary-2023.

Liquidityrisksmanagedwellbyregionalbanks

CustomerdepositsinGCCbanksshowedasmallergrowthinthelastfewquartersresultinginasmallandgradualincreaseintheloan-to-depositratio.SincecorecustomerdepositsformthebackboneforfundingforGCCbanks,recentreportshadpointedoutliquidityissueswithbanksinsomeGCCcountries.However,almostallcentralbanksintheGCChaverecentlyaffirmedadequateliquidityinthebankingsectorandhavereiteratedcontinuedsupporttothesector.AnS&Preportalsopointedtothestrongandstablefundingprofileofbanksintheregionintheformofcustomerdepositsaswellasrelianceonexternalfundingincaseofstressontheliquidityfront.Recently,thegovernorofSAMAhighlightedthestrongliquidityandcapitalizationofbanksintheKingdomandstressedthatlendingrisksremainedmoderateintheKingdomandalltheprecautionaryratiosforthebankingsystemhaveexceededtherequirementsaspertheBaselnorms.

Centralbankdatashowsresilientlendingdespitehigherinterestrates

CreditgrowthintheGCCremainedstrongduringQ2-2023despitehigherinterestrates,indicatingstrongeconomicactivityandbusinessconfidenceintheregion.ManufacturingactivitydatafromBloomberg(MarkitWholeEconomySurveys)showedPMIfiguresstayedstrongduringthequarterabovethegrowthmarkof50forDubai,Qatar,SaudiArabiaandUAE.ThemanufacturingactivityinSaudiArabiaremainedrobustwithPMIat59.6pointsduringJune-2023andremainedelevatedatduringJuly-2023ataslightlylowermarkof57.7.UAEandQataralsoboastedstrongPMIfiguresof56.9and53.8duringJune-2023.

GCCBankingSectorReport

3

DatafromGCCcentralbanksshowedagrowthinlendingactivityacrosstheregionduringQ2-2023althoughtherateofgrowthdeceleratedinseveralmarketsduringthequarter.SaudiArabiarecordedthestrongestgrowthinoutstandingcreditfacilitiesduringQ2-2023at2.5%whilegrowthinKuwait,Qatar,BahrainandOmanwerebelow1%.GrowthinSaudilendingwasledbyUtilities,RealEstateandTradesectorsthatsawmorethan5%q-o-qgrowthduringQ2-2023.Personalfacilitieswerealsoup2.2%duringthequarterwhileadeclineintheFinancesub-grouppartiallyoffsettheoverallgrowth.ForUAE,althoughdataforthequarterwasnotavailableatthetimeofwritingthisreport,theQ2-2023quarterlycreditsentimentsurveyfromthecentralbankofUAEshowedthatbankswerewillingtolendgiventhepositiveeconomicoutlookandimprovingassetquality.IntermsofsectorsintheUAE,growthwasseenintheretailandwholesaletradesector,followedbymanufacturingandpropertydevelopment.Inaddition,thepositiveoutlookforthepropertymarket,highercustomers’sales,andincreaseinfixedassetinvestmentresultedinhighercreditdemandthatmorethanoffsetthenegativeimpactofrisinginterestrates.InKuwait,themarginalq-o-qgrowthof0.2%cameaftergrowthinlargersubgroupsincludingInstallmentloans,RealEstateandTradewereoffsetbydeclinesinlendingtoothersectors.

Listedbanklendingtouchesanewrecordhigh

GCCbankscontinuedtorecordgrowthinlendingduringQ2-2023backedbygrowthinallmarketsintheGCC.AggregategrossloansreachedanewrecordhighofUSD1.91Trillion,up1.9%q-o-qand6.5%y-o-y,mainlyledbystronggrowthinbanksinSaudiArabia,UAEandBahrain.Saudi-listedbanksonceagainreportedthestrongestq-o-qgrowthinlendingat2.7%toreachUSD640BnattheendofQ2-2023.Bahrain-listedbankswerenextwithagrowthof2.5%ingrossloansthatreachedUSD58BnfollowedbyUAE-listedbankswithagrowthof2.1%toreachUSD529Bn.BanksinKuwait,QatarandOmanreportedslightlysmallergrowthingrossloansduringthequarter.Intermsoftypeofbanks,conventionalbanksonceagainrecordedabiggergrowthinlendingduringthequarterwithagrowthof2.2%toreachaggregateconventionalloansofUSD1.3Trillion,whileIslamiclender’slendinggrewatalmosthalfthatpaceof1.3%toreachUSD596Bn.

ThetrendinnetloangrowthwasalmostinlinewithgrossloanwithaggregatenetloansatUSD1.82TrillionattheendofQ2-2023registeringaq-o-qgrowthof1.7%.ThegrowthwasledbyhighernetloansrecordedinallGCCcountrieswithSaudiArabiarecordingthebiggestgrowthof2.8%q-o-qwhilethatinQatarwasflat.

Depositgrowthat9-quarterlowlevel

Totalcustomerdepositsreportedbylisted-GCCbankscontinuedtoshowgrowthfortheninethconsecutivequarterduringQ2-2023toreachanewrecordhighofUSD2.3TrillionascomparedtoUSD2.28TrillionattheendofQ1-2023.However,theq-o-qgrowthindepositswasthesmallestsinceQ2-2021at1.0%ascountryleveldatashowedmixedtrendsduringthequarter.Bahrainibanksreportedthebiggestq-o-qincreaseincustomerdepositsthatreachedUSD86Bnwithanincreaseof5.4%.SaudiandUAEbankswerenextwithgrowthof1.8%and1.4%butwithamuchlargerdepositsofUSD730BnandUSD715BnattheendofQ2-2023,respectively.Ontheotherhand,QatarandKuwaitibanksreportedadeclineindepositsduringthequartercontractingby0.8%forboththecountries.DepositsinconventionalbanksintheGCCgrewby1.1%duringthequartertoreachUSD1.64TrillionwhilethatinIslamicbanksincreasedatasmallerrateof0.6%toreachUSD660Bn.

Loan-to-depositratiogainsmarginally

Theaggregateloan-to-depositratiofortheGCCbankingsectorremainedbelowthe80%markforthefifthconsecutivequarterattheendofQ2-2023toreach79.0%,lowerthanthehistoricalaveragesforbanksintheregion.Thegaincameafterthequartersawsturdygrowthinlendingascomparedtocustomerdeposits.Atthecountrylevel,thegainwasbroad-basedasseenfromgrowthinalmostallmarketsintheGCC,barringBahrainibanksthatreporteda180bpsdeclineintheratiothatreached65.0%.Ontheotherhand,Kuwaitibanksreportedthebiggestimprovementof130bpswiththeratioreaching77.7%followedbySaudiandQataribankswithimprovementsof80bpsand70bps.Omanibankscontinuedtoboastthehighestloan-to-depositratiointheGCCduringthequarterat89.7%aftera40bpsq-o-qimprovementduringQ2-2023whileBahrainibanksreportedthelowestratioduringQ2-2023.

NetinterestincomeseespartialrecoveryinQ2-2023

AggregatenetincomereportedbybankslistedintheGCCwitnessedpartialrecoveryinQ2-2023afterseeingitsfirstdeclineinfivequartersduringQ1-2023.TotalnetinterestincomereachedUSD20.0BnduringQ2-2023fromUSD19.8BninQ1-2023butremainedbelowthehistoricalrecordhighofUSD20.1BnrecordedinQ4-2022.TheincreaseinQ2-2023camedespitecostoffundsreachingoneofthehighestlevelsonrecordat3.1%ascomparedto2.5%recordedinQ1-2023.

Intermsofy-o-ygrowth,however,thegrowthinnetinterestincomewashealthyat16.2%reflectingincreasingimpactofconsecutiveratehikesimplementedbybanksintheGCCfollowingrateshikesintheUS.Theq-o-qtrendintheGCCremained

GCCBankingSectorReport

4

mixedwithOmanandQatarrecordingdeclinesduringthequarterwhiletherestofthecountryaggregatesshowedgrowth.Kuwaitibanksrecordedthebiggestq-o-qincreaseinnetinterestincomeduringQ2-2023at3.3%toreachUSD2.2BnfollowedbyUAEandBahrainibankswithgrowthof1.7%and1.0%,respectively.Saudibanksreportedamarginalgrowthof0.2%toreachnetinterestincomeofUSD6.8Bn,slightlyaboveUAE-listedbanksaggregateofUSD6.6Bn.InKuwait,nineoutoftenbanksreportedhighernetinterestincome,whileBurganBankreportedadeclineduringthequarterduetoafallinnetinterestincomefrominternationaloperations.InSaudiArabia,threeoutoftenbanksreportedadeclineinnetinterestincomewithSNBreportingthebiggestdeclinecomparedtoQ1-2023.

Toplinegrowthatfive-quarterlow

TotalbankrevenueforGCCbanksonceagainregisteredq-o-qgrowthduringQ2-2023by1.3%toreachanewrecordhighofUSD29.2BnascomparedtoUSD28.8BnduringQ1-2023.Agrowthinaggregatenetinterestincomeaswellasnon-interestincomesupportedthegrowthintotalrevenues.Theq-o-qincreasewasledbyabroad-basedimprovementinrevenuesacrosstheGCCduringthequarter,barringKuwaitibanksthatreportedadeclineof0.9%duringthequarter.UAEbanksreportedthebiggestincreaseduringthequarterat3.1%followedbyQataribankswithagrowthof1.3%.Saudi-listedbanksreportedonlymarginalgrowthof0.2%duringQ2-2023.

Aggregatenon-interestincomewitnessedgrowthforthethirdconsecutivequarterbutwitnessedasignificantlysmallergrowthduringQ2-2023ascomparedtogrowthduringthepreviousquarter.Totalnon-interestincomereachedUSD9.2BnduringQ2-2023,registeringaq-o-qincreaseof2.9%and18.4%y-o-y.AggregatesforalltheGCCcountriesshowedgrowthbarringKuwaitibanksthatreportedadeclineof9.5%.

CostoptimizationcontinuedduringQ2-2023

GCCbanksonceagaindemonstratedcostcontainmentmeasuresduringQ2-2023thatwasreflectedintheaggregateoperatingexpensesduringthequarter.Totaloperatingexpensesregisteredthesecondconsecutivequarterofdeclineby0.7%toreachUSD11.1BnduringQ2-2023.Qataribanksreportedthebiggestq-o-qdeclineinoperatingexpensesat-8.6%followedbyKuwaitandUAE-listedbankswithcostdeclinesof4.8%and1.1%,respectively.Ontheotherhand,SaudibanksonceagainaddedcostswithhigheroperatingexpensesthatreachedUSD3.6Bnwithaq-o-qincreaseof4.0%.BankslistedinBahrainalsoshowedanincreaseof5.9%intheirquarterlyoperatingexpenses.

LLPreaches17-quarterlowlevel

LoanlossprovisionsbookedbylistedbanksintheGCCdeclinedforthesecondconsecutivequarterinQ2-2023fallingby12.2%toreachUSD2.7Bn.However,provisionsincreasedduring1H-2023by2.4%toreachUSD5.7BnthisyearascomparedtoUSD5.6Bnin1H-2022.Moreover,quarterlyperformanceofindividualmarketsintheGCCremainedmixedwithKuwait,SaudiArabiaandtheUAEreportingadeclineinLLPwhiletheremainingthreemarketsreportedq-o-qgrowth.Kuwaitrecordedthebiggestdeclineinprovisionsduringthequarterwithafallof51.3%toreachUSD0.14Bnaftersevenoutoftenbanksreportedadeclineduringthequarter.TheperformanceofSaudi-listedbankswassimilarwitheightoutoftenbanksshowingadeclinethatresultedina24.2%declineatthecountrylevel.TheUAEalsoreportedasecondconsecutivequarterofdeclineinprovisionsalbeitsignificantlylowerat-9.2%ascomparedto-40.1%q-o-qdeclineduringQ1-2023.Ontheotherhand,Bahrainibanksreportedthebiggestincreaseduringthequarterat15.5%followedbyOmanandQatarwithgrowthof6.4%and1.9%,respectively.Outofthe58banksweanalyzed,34banksreportedaq-o-qdeclineinprovisionswhereas24banksreportedhigherprovisions.

NIMatmulti-quarterhighreflectinghigherrates

AggregatenetinterestmarginreportedbyGCC-listedbanksincreasedforthethirdconsecutivequarterduringQ2-2023toreach3.2%ascomparedto3.1%duringthepreviousquarter.Theincreasereflectedelevatednetinterestincomeduringthetrailingtwelve-monthperiodaddingadditionalratehikessincethestartof2022.AsmallerincreaseinearningassetsalsocontributedtothegrowthinNIMs.Theq-o-qgrowthinNIMwasseenacrosstheGCCbankingsectorsbarringQatarwhichreportedamarginaldeclineduringQ2-2023.UAE-listedbanksonceagainshowedthebiggestimprovementinNIMsduringthequarterwithanincreaseof16bpstoreach3.44%followedbymarginalsinglebpsincreaseintherestoftheGCCcountries.Withtheimprovement,UAEonceagainrankedfirstintheGCCintermsofNIMsfollowedbySaudiArabianbanksat3.23%and3.05%inthecaseofQataribanksduringQ2-2023.

GCCBankingSectorReport

5

GCCBankingSector–ReturnonEquity(%)

KuwaitSaudiArabiaUAEQatarBahrainOmanGCC

Source:ReutersRefinitiv,FinancialStatements,KamcoInvestResearch

15.9%

12.1%

12.8%

10.5%

13.0%

8.1%

7.5%

GCCbankingRoEreachesoneofthehighestonrecord

Aggregatereturnonequity(RoE)fortheGCC

bankingsectorcontinuedtoshowimprovement

duringQ2-2023reachingoneofthehighestlevels

overthelastfewyearsat13.0%ascomparedto

12.6%attheendofQ1-2023,reachingalmostpre-

pandemiclevels.Theratioalsoimprovedintermsof

y-o-ycomparisonbystrong160bpssupportedbyan

increaseinaggregate12-monthprofitabilitycoupled

witharelativelysmallergrowthinshareholders’

equity.TotalshareholderequityreachedUSD392.4

BnattheendofQ2-2023,registeringanincreaseof

2.3%ascomparedtoamarginaldeclinereportedin

Q1-2023.

Atthecountrylevel,UAE-listedbanksonceagain

toppedintheregionwiththehighestRoEattheend

ofQ2-2023at15.9%closelyfollowedbySaudi

ArabianandQataribankswithRoEsof12.8%and

12.1%,respectively.Thebiggestq-o-qgrowthinRoEwasalsoseenforUAE-listedbanksat+110bpswhichwasmainlyledbyelevatedTTMprofitsaswellasarelativelysmallergrowthintotalshareholders’equity.ROEsforKuwaitibanksstayedelevatedatadouble-digitlevelof10.5%whileBahrainiandOmanibanksreportedRoEsat7.5%and8.1%,respectively.

InvestmentStrategy&Research

GCCBankingSectorReport

6

1,817

1,755

1,786

1,728

1,708

1,677

1,636

1,619

1,593

NetLoans(USDBn)

Q2-21Q3-21Q4-21Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23

80.4%

80.1%

80.5%

79.9%

79.3%

79.0%

79.0%

78.9%

78.4%

Loan-DepositRatio(%)

Q2-21Q3-21Q4-21Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23

4.1

3.8

3.2

3.0

3.23.3

2.9

2.7

2.7

LoanLossProvision-IS(USDBn)

Q2-21Q3-21Q4-21Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23

4.1%

4.2%

4.0%

3.8%

3.7%

3.7%

3.7%

3.6%

3.6%

YieldonCredit(%)

Q2-21Q3-21Q4-21Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23

3.1%

2.5%

2.0%

1.5%

1.2%

1.3%

1.2%

1.3%

1.3%

CostofFund(%)

Q2-21Q3-21Q4-21Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23

KeyBankingSectorMetrics:GCC

TotalAssets(USDBn)

ConventionalIslamic

3,054

2,880

2,720

869

771

728

1,9441,9801,9922,0192,0792,1092,0982,1562,186

3,007

2,847

2,681

2,629

2,939

2,766

841

851

768

748

700

685

Q2-21Q3-21Q4-21Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23

CustomerDeposits(USDBn)

2,2772,299

2,1662,1872,213

1,9812,022

2,0472,083

Q2-21Q3-21Q4-21Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23

TotalBankRevenue(USDBn)

NetInterestIncome

Non-InterestIncome

29.2

27.7

23.8

21.8

9.2

8.1

17.218.620.119.820.0

28.8

26.0

25.0

23.7

22.5

15.3

15.7

15.7

15.6

8.1

9.0

6.8

6.5

7.6

7.8

7.4

Q2-21Q3-21Q4-21Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23

NetIncome(USDBn)

13.7

13.2

10.911.211.411.3

9.9

8.5

8.6

Q2-21Q3-21Q4-21Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23

Cost-to-IncomeRatio(%)

39.8%

39.4%

39.3%

39.1%

38.9%

39.4%

39.1%

39.8%

39.8%

Q2-21Q3-21Q4-21Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23

Source:Reuters,Bloomberg,BankFinancials,KamcoInvestResearch

GCCBankingSectorReport

7

230.4231.6233.7

188.0191.9195.9200.0202.0204.4

NetLoans(USDBn)

Q2-21Q3-21Q4-21Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23

77.8%

76.4%

75.8%

75.5%

75.1%

75.8%

77.7%

76.3%

75.2%

Loan-DepositRatio(%)

Q2-21Q3-21Q4-21Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23

2.76%

2.75%

2.74%

2.68%2.68%

2.62%

2.62%

2.57%

2.58%

NetInterestMargin(%)

Q2-21Q3-21Q4-21Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23

45.0%

44.6%

44.1%

41.8%

39.9%

42.1%

42.0%

44.8%

42.4%

Cost-to-IncomeRatio(%)

Q2-21Q3-21Q4-21Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23

1.301.42

0.800.850.930.920.88

0.66

1.23

NetIncome(USDBn)

Q2-21Q3-21Q4-21Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23

KeyBankingSectorMetrics:Kuwait

TotalAssets(USDBn)

I3s2la1m8ic326.8330.7328.2

187.5187.7187.7

131.0133.5133.8137.2139.3138.1

179.0183.3188.0189.6191.4190.1199.8198.6197.1

Q2-21Q3-21Q4-21Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23

Conventional

310.0316.8

CustomerDeposits(USDBn)

304.1303.4300.9

250.0255.4259.4261.6266.6262.7

Q2-21Q3-21Q4-21Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23

TotalBankRevenue-USDBn

3.10

3.07

NetInterestIncomeNon-InterestIncome

2.52

2.64

2.44

2.39

2.50

2.33

0.92

1.01

0.72

0.68

0.73

0.72

0.69

0.62

0.82

2.16

2.35

2.09

1.79

1.72

1.71

1.95

1.67

1.69

3.06

Q2-21Q3-21Q4-21Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23

CostofFund(%)

3.3%

2.8%

2.2%

1.7%

1.3%1.4%

1.3%

1.3%

1.3%

Q2-21Q3-21Q4-21Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23

LoanLossProvision-IS(USDBn)

0.57

0.36

0.38

0.30

0.320.33

0.14

0.14

0.08

Q2-21Q3-21Q4-21Q1-22Q2-22Q3-22Q4-22Q1-23Q2-23

Source:Reuters,Bloomberg,BankFinancials,KamcoInvestResearch

GCCBankingSectorReport

8

KeyBankingSectorMetrics:SaudiArabia

TotalAssets(USDBn)

ConventionalIslamic

NetLoans(USDBn)

771.1785.5808.0838.8

879.9886.3900.1

934.2954.3

301.3311.8321.6331.6339.2

243.6

556.8578.6574.5578.5602.6615.1

282.0

269.3

255.9

538.7

529.6

527.5

488.3502.0516.1543.3

566.3582.3590.7610.1627.0

Q2