Riyadh, (Business News Report)|| Gulf banks’ profits grew in the first quarter, supported by strong performance in Qatar and Saudi Arabia, which led the rise.
According to a report by the Kuwaiti investment firm Kamco Invest, the Gulf banks’ net profits rose to $10.9 billion in the first quarter of 2022.
Meanwhile the profit of Gulf banks in the same quarter of last year was $8.4 billion.
A report issued by the Kuwait Corporation said that the growth in the Gulf banking sector was driven by the strong performance in Qatar and Saudi Arabia, while the report did not mention the value of quarterly profits for banks in the Gulf countries in detail.
The report stated that the growth of the banking sector came with the support of the strong economic recovery and the increase in demand after the Coronavirus pandemic.
The increase in oil prices since the beginning of the year has also contributed to boosting growth rates and business confidence, and governments across the region have strengthened economic investment plans with the support of increasing oil revenues, according to the report.
According to the report, shareholders’ equity in the Gulf banking sector increased by a lower rate of 0.4% on a quarterly basis in the first quarter of 2022, to reach $355.2 billion.
This led to the return on equity of 10.8% in the first quarter of 2022, which is one of the highest rates recorded for the Gulf banking sector.
The sharp drop in loan loss provisions held by Gulf banks on a quarterly basis also contributed to boosting profits.
Total provisions decreased by a quarter to reach $2.9 billion in the first quarter of 2022, compared to $3.8 billion in the fourth quarter of 2021, while provisions decreased on an annual basis by 21.4%.
Lending activity remained strong during the first quarter of 2022, which led to record levels thanks to the high growth witnessed in loans in the first quarter of 2022, which is the highest in three quarterly periods.
Total loans at the end of the first quarter of the year amounted to $1.8 trillion, a growth of 2.1% on a quarterly basis, and 10.1% on an annual basis.