S&P: drop the price of oil will affect close to Saudi banks

The Standard & Poor's Ratings Services said that lower oil prices will soon begin to impact negatively on the Saudi banks are likely to see a rise in non-performing loans by the end of the year, banks and bucked in the Kingdom expectations lots yen from analysts so far by announcing good results in general despite the descent rate oil about 60 percent since June of last year, and drew Agency to the emergence of problems related to asset quality usually takes a couple of seasons at least flexible economies

And non-performing loans amounted to total loans ratio of 1.2 percent in the first quarter, up from 1.1 in 2014, according to the Saudi Arabian Monetary Agency (SAMA).

This represents a decline from the peak amount of 3.3 percent in mid-2010 when he suffered the financial sector in the Kingdom some of the consequences of the global financial crisis

The S & P said that the historical data indicate that there is a clear link between the non-performing loans and oil prices.
Agency data indicated that after tumbling crude prices to near $ 30 a barrel in late 2008 doubled non-performing loans ratio to more than double in the following months, is likely to strengthen this link if the government began to cut spending and reduce the money pumped into the economy as expected, and with the Analysts that not too concerned for the safety of the situation of the banking sector as regulators require banks to maintain much higher than the requirements of the Basel Convention coverage ratios three banks are required to set aside provisions for loans in anticipation