The outlook for Saudi Arabia’s banking system remains stable, says Moody’s Investors Service in a new Banking System Outlook. The key drivers of the outlook are (1) a benign operating environment; (2) low problem loan levels; (3) strong loss-absorption capacity, underpinned by high capital buffers and solid profitability; and (4) the sector’s stable, low-cost deposit base and ample liquidity, Global Arab Network reports according to press release. However, Moody’s says that these system-wide strengths will remain counterbalanced by structural weaknesses — high loan and deposit concentrations and the financial opacity of certain family conglomerates– over the 12-18 month outlook period.
