Banking & Finance
Saudi, UAE Bank Revenues Seen Pressured by US Rate Cuts

(Bloomberg) — Saudi Arabia and United Arab Emirates banks may have their annual revenue estimates cut by one or two percentage points for every 25 basis point decline in U.S. interest rates, according to Bloomberg Intelligence.
A 25 basis point cut in U.S. rates will pull down the net interest margin at banks by about 6 basis points, analyst Edmond Christou said in a report on Sunday. The margin is the difference between what a bank earns on assets such as loans and what it pays out on liabilities such as deposits.
Currencies in Saudi Arabia and the UAE are pegged to the dollar, and the two countries usually follow interest-rate changes made by the U.S. Federal Reserve. The market is pricing in about a 75 basis point reduction in U.S. rates by year-end, data compiled by Bloomberg show.
Read More: Best Banks & NBFCs in Oman
Loans make up more than 70% of Gulf banks’ earnings assets that are largely floating-rate corporate facilities, and changes in interest rates have a huge impact on income from lending, according to the Bloomberg Intelligence report.
The net interest margin at Emirates NBD PJSC, the UAE’s second-biggest bank, may fall by 10 to 12 basis points for every 25 basis points cut in rates, the most among the top four UAE lenders, according to Christou. The net interest margin at Dubai Islamic Bank PJSC and Saudi lenders Al Rajhi Bank and Riyad Bank may hold up better.
In a falling interest-rate environment, banks may increasingly focus on raising the contribution of non-interest income, favor fixed-rate lending or more investments, according to the report. Lower interest rates will also mean cheaper credit for companies and individuals, which is likely to support near-term loan growth and ease repayment pressure.
Read More:
https://www.businessliveme.com/two-biggest-arab-economies-best-pickup-years/
-
News1 month ago
Offer Price, Overview, Investors: Here’s Everything You Need to Know About Asyad Shipping’s Mega IPO
-
OER Magazines1 month ago
OER, February 25
-
Automotive2 months ago
[REVIEW] A Legend Reinvented: The Nissan Patrol Y63 Blends Heritage with Modern Mastery
-
Alamaliktistaad Magazines1 month ago
Al-iktisaad, February 2025
-
Energy1 month ago
Dubai Supreme Council of Energy Unveils 5th Emirates Energy Award 2023–2025 in Muscat
-
News2 months ago
Oil Prices Rise as Investors Assess New US Tariff Threats
-
News2 months ago
Middle East Emerging as a Key Destination for Sports Tourism
-
Banking & Finance1 month ago
Alizz Islamic Bank Partners with Visa to Launch Premium Shari’a-Compliant Card Solutions
You must be logged in to post a comment Login