Fitch sees limited pandemic impact on Saudi banks

Fitch sees limited pandemic impact on Saudi banks
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Updated 14 October 2021

Fitch sees limited pandemic impact on Saudi banks

Fitch sees limited pandemic impact on Saudi banks

CAIRO: Fitch Ratings agency revised outlook for Saudi banks as it said the impact of the pandemic on their performance has been contained. 

The agency said in a note on Wed. that it revised the outlooks on all Saudi banks’ Long-Term Issuer Default Ratings to "Stable" in second and third quarter of this year to "reflect reduced pressures on the operating environment and the Stable Outlook on the sovereign rating."

It also kept weighted average Viability Rating of ‘bbb+’ for all Saudi banks, the highest in the Gulf Cooperation Council, according to the note.

Asset quality and profitability underwent little deterioration and financial metric stabilized, Fitch added. Government support, particularly its interest-free deposits, was key for these improvements in the banking sector.

Additionally, the significant loan growth experienced in 2020 and in the first half of 2021 (14.9 percent and 19 percent respectively) was another factor that enhanced banks’ performance. Loan growth was fuelled mainly by steady retail mortgages.

Rebounds in the global oil demand, falling oil prices and boosts in the non-oil sector are also expected to improve the operating environment for banks, Fitch pointed out.


Euro area experiences 13-year annual inflation high: Economic wrap

 Euro area experiences 13-year annual inflation high: Economic wrap
Updated 16 sec ago

Euro area experiences 13-year annual inflation high: Economic wrap

 Euro area experiences 13-year annual inflation high: Economic wrap

Eurostat data revealed the Euro area’s annual inflation rate reached a 13-year high in September as consumer prices rose by 3.4 percent. As elsewhere, surging energy costs were mainly responsible as they jumped by 17.6 percent. In addition, the prices of food, alcohol and tobacco increased by 2 percent.

On a monthly basis, consumer prices went up by 0.5 percent in September, edging a little higher over the previous month’s 0.4 percent.

Similarly, annual core inflation rate, which removes variations in energy, food and tobacco prices, reached a near 13-year high of 1.9 percent in September.

Another inflation high

According to Statistics Canada, the country's inflation rate was 4.4 percent in September, the highest level since February 2003. This was due to last year’s low base effects and supply chain disruptions.

Transportation costs went up considerably by 9.1 percent as gasoline prices leaped by 32.8 percent in September.

This was accompanied by a 0.2 percent monthly change in consumer prices.

Yearly core inflation rate climbed to 3.7 percent in September, rising from the 3.5 percent recorded in the previous month.

Meanwhile, South Africa’s annual inflation rate marginally increased to 5 percent in September from 4.9 percent in the earlier month, Statistics South Africa said. It remained above the 4.5 percent midpoint goal set by the South African Reserve Bank.

Consumer prices ticked up 0.2 percent month-on-month in September, slowing from a 0.4 percent gain in the prior month.

Eurozone’s current account 

In August, the Euro area's current account surplus declined to €17.6 billion ($20.5 billion) from the same month last year when it stood at €24.9 billion ($29 billion), European Central Bank data showed,

The services surplus slightly jumped to €5.4 billion ($6.3 billion) while the goods surplus significantly narrowed from €24.3 billion ($28.3 billion) to €12.9 billion ($15 billion).

Italian construction

According to data released by Istat, construction output in Italy experienced a rebound in August as it jumped by a monthly rate of 1.4 percent, compared to the previous month’s 0.8 percent decline.


Barclays third quarter profit doubles amid global merger frenzy

Barclays third quarter profit doubles amid global merger frenzy
Updated 41 min 41 sec ago

Barclays third quarter profit doubles amid global merger frenzy

Barclays third quarter profit doubles amid global merger frenzy
  • Barclays' results were boosted by the bank releasing 622 million pounds in cash set aside for bad debt charges that have yet to materialise

Barclays reported on Thursday a doubling of third-quarter profits, beating market expectations, as it followed Wall Street rivals in reaping bumper investment banking fees from a surge in advisory mandates and equities trading.


The British bank posted profit before tax of 2 billion pounds ($2.8 billion) for the July-September period, better than the 1.6 billion pounds average of analysts' forecasts and twice the 1.1 billion pounds it made in the same period a year ago.


The strong performance showed the value of Barclays' U.S. business, where it makes nearly half its income, and British banks' balance sheets holding up amid the pandemic with the rest of the sector due to report over the next two weeks.


Barclays' advisory and equities business had a record performance in the first nine months of the year, the bank said, driving a return on equity for the overall investment bank of 16.4 percent compared to 10.5 percent a year ago.


Barclays CEO Jes Staley told reporters the lender was relatively relaxed about the prospect of growing inflation in Britain, saying annual price rises of up to 4 percent could be positive for the bank so long as it was supported by economic growth.


Barclays' results were boosted by the bank releasing 622 million pounds in cash set aside for bad debt charges that have yet to materialise, after government support measures propped up businesses.


Barclays is alone these days among British banks in competing with Wall Street rivals on their home turf across the main investment banking businesses of advisory, equities and fixed income.


That helped it cash in on the surge in M&A fees that saw U.S. peers such as Goldman Sachs and Morgan Stanley smash earnings estimates for the third quarter, as global merger volumes shattered all-time records.


Barclays reported investment banking income from advising on deals rose to 971 million pounds in the third quarter from 610 million in the same period a year ago, while equities income rose 10 percent.
 


UK gets over 48 billion pounds demand for second green gilt

UK gets over 48 billion pounds demand for second green gilt
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Updated 57 min 43 sec ago

UK gets over 48 billion pounds demand for second green gilt

UK gets over 48 billion pounds demand for second green gilt
  • The sale will also help Britain's government polish its green credentials as it prepares to host the United Nations COP26 climate conference

Britain received over 48 billion pounds ($66 billion) of demand within half an hour of opening order books for its second green government bond, a month after its first green gilt drew a record 100 billion pounds in demand from investors.


Bookrunners said Britain expected to sell 6 billion pounds of the new July 2053 gilt, compared with 10 billion pounds of the July 2033 green gilt which last month became the largest ever sovereign issue of a green bond.


Proceeds from the sale will be ring-fenced for projects such as offshore wind farms and zero-emission buses.


The sale will also help Britain's government polish its green credentials as it prepares to host the United Nations COP26 climate conference in Glasgow later this month.


The new July 2053 gilt will pay a 1.5 percent coupon and is being offered with a yield that is 0.5 to 1 basis points below that of the benchmark July 2052 conventional gilt, bookrunners on the transaction said.


Order books are due to close at 0830 GMT.


Britain has lagged behind other European countries such as Germany, Italy and Spain in issuing green bonds, partly because of concern that investors would want higher interest rates to compensate for a relative lack of liquidity.


However, the appetite for green debt has surged over the past couple of years - partly because of its appeal to funds dedicated to buying green assets, but also due to concern that regulators and other stakeholders will in the future look more closely at the overall environmental impact of portfolios.


TASI remains stable in early trading today: Market wrap

TASI remains stable in early trading today: Market wrap
Updated 58 min 14 sec ago

TASI remains stable in early trading today: Market wrap

TASI remains stable in early trading today: Market wrap

Saudi Arabia’s Tadawul All Share index barely changed on Thursday morning as it went up by 15.55 points to open at 11,919 points.

Here’s a wrap of the market’s latest news:

Arriyadh Development’s net income more than doubled as it recorded a SR325.2 million ($86.7 million) profit in the first nine months of 2021.

A bad day for dairy companies

NADEC made losses of SR7.8 million ($2.1 million) in the first nine months of 2021, following a profit of SR104.9 ($28 million) in the same period last year.

SADAFCO’s profits slump by 35 percent in the six month period ending on September 30 2021. Its net profit was valued at SR91.7 million ($24.5 million) for the period.

Meanwhile, a 2.5 percent interim cash dividend for the first half of 2021 was approved by Banan Real Estate, a bourse statement by the company said. The total value of dividends is SR5 million ($1.3 million) and the payment date is to be determined

IPOs

Arabian Contracting Services has set SR100 as the final offering price for its IPO. Notably, its IPO was 126.6 percent oversubscribed.

Moreover, Nayifat Finance also set a price range for its offering, to be between SR29 and SR34.


Egypt’s Banque Misr to launch its first Riyadh branch by the end of 2021: Bank’s head

Egypt’s Banque Misr to launch its first Riyadh branch by the end of 2021: Bank’s head
Updated 21 October 2021

Egypt’s Banque Misr to launch its first Riyadh branch by the end of 2021: Bank’s head

Egypt’s Banque Misr to launch its first Riyadh branch by the end of 2021: Bank’s head

Head of Egypt's Banque Misr is hoping to launch the bank’s first branch in Riyadh by the end of this year, he said in an interview with Al-Arabiya. 

Mohamed El-Etreby said that talks are taking place regarding the organisation of work of Saudi Arabia’s branch.

El-Etreby noted that he expects Banque Misr to obtain a digital bank license by the first quarter of 2022, stressing the bank’s vision towards financial technology and digital banks.