Oil Price and Banking Sectors in Gulf Cooperation Council Economies before and after the Global Financial Turmoil: Descriptive Analysis

Abdulazeez Y.H. Saif-Alyousfi, Rohani Md-Rus and Kamarun Nisham Taufil Mohd
Additional contact information
Abdulazeez Y.H. Saif-Alyousfi: Department of Finance, School of Economics, Finance and Banking, College of Business, Universiti Utara Malaysia, Sintok, Kedah, Malaysia
Rohani Md-Rus: Department of Finance, School of Economics, Finance and Banking, College of Business, Universiti Utara Malaysia, Sintok, Kedah, Malaysia
Kamarun Nisham Taufil Mohd: Department of Finance, School of Economics, Finance and Banking, College of Business, Universiti Utara Malaysia, Sintok, Kedah, Malaysia

International Journal of Energy Economics and Policy, 2018, vol. 8, issue 6, 89-101

Abstract: In this paper, we analyze the evolution of the banking sector in the six GCC countries including concentration, trends in credit growth, balance sheets, and financial safety as well as oil price over the period 2000-2014. In general, our analysis finds that the level of capitalization of banks in GCC countries appears comfortable despite the adverse effect of the financial crisis. Despite apparent financial soundness, there are certain weaknesses in the banking sector of GCC countries which needs investigation. Firstly, GCC countries have registered sharp growth in of credit in consonance with the steady rise in the price of oil straining the liquidity position of banks. Secondly, some banking systems in GCC countries are highly exposed to households secured by their salaries especially in Bahrain (50 to 60%) and Qatar 70%). Thirdly, although the overall NPLs ratio in the GCC banking sector is at historically low levels, however, it has remained high when compared to the average NPLs ratio of the global banks. Finally, we find that banks in GCC countries seem to keep low levels of liquidity compared to international standards.

Keywords: Oil price; Banking sector; Credit growth; Financial statements; Financial soundness; Global Financial Crisis; GCC countries (search for similar items in EconPapers)
JEL-codes: C23 G20 G21 L2 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.econjournals.com/index.php/ijeep/article/download/7074/3996 (application/pdf)
https://www.econjournals.com/index.php/ijeep/article/view/7074/3996 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eco:journ2:2018-06-12

Access Statistics for this article

International Journal of Energy Economics and Policy is currently edited by Ilhan Ozturk

More articles in International Journal of Energy Economics and Policy from Econjournals
Bibliographic data for series maintained by Ilhan Ozturk ().