{"id":87422,"date":"2024-06-30T00:00:00","date_gmt":"2024-06-30T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2024\/06\/30\/local-islamic-banks-standalone-credit-profiles-set-to-remain-robust-next-year-says-fitch-ratings\/"},"modified":"2024-06-30T00:00:00","modified_gmt":"2024-06-30T00:00:00","slug":"local-islamic-banks-standalone-credit-profiles-set-to-remain-robust-next-year-says-fitch-ratings","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2024\/06\/30\/local-islamic-banks-standalone-credit-profiles-set-to-remain-robust-next-year-says-fitch-ratings\/","title":{"rendered":"Local Islamic banks\u2019 standalone credit profiles set to remain robust next year, says Fitch Ratings"},"content":{"rendered":"

Saudi\u2019s Islamic banks\u2019 standalone credit profiles are expected to remain robust this year <\/strong>and in 2025 <\/strong>on the back of high oil prices and favorable operating conditions, Arab News<\/a> reported, citing a report by Fitch Ratings. However, a higher credit growth would press banks\u2019 capital, funding and liquidity, pushing them to diversify their funding bases through wholesale funding which includes sukuk issuance. It said that while sukuk issuance \u201cwas becoming a bigger part of the funding mix\u201d, it expects deposits to remain the primary source of funding.<\/p>\n

Islamic banks were highly profitable last year<\/strong>, outperforming their traditional banking peers due to high margins supported by lower funding costs, according to the report. Their robust retail franchises also helped lure in a larger base of non-profit-bearing deposits, allowing them to sustain profitability despite ongoing challenging financial conditions.<\/p>\n

A look at funding + liquidity:<\/strong> Fitch Ratings said customer deposits accounted for 80% of funding for Islamic banks which is slightly lower than the 84% reported in traditional banks. It saw the banks\u2019 financing activities grow at a faster pace than their deposit base after their average financing-to-deposits ratio rose to 102% last year.<\/p>\n","protected":false},"excerpt":{"rendered":"

Deposits are set to remain primary source of funding for Islamic banks, according to the report<\/p>\n","protected":false},"author":1,"featured_media":87423,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2617],"tags":[19,1001,10,307,2254],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-87422","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-banking","tag-banks","tag-enterpriseam-ksa","tag-fitch-ratings","tag-islamic-banks","wpautop","entry"],"acf":{"mongo_id":"f35d73e9-6a39-4871-b285-033b0a5197b2","order":"7","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2024\/2\/403.jpg","photo_position":"above","homepage_title":"","full_issue_title":"Local Islamic banks\u2019 standalone credit profiles set to remain robust next year, says Fitch Ratings","related_issue":[87409],"teaser":"Deposits are set to remain primary source of funding for Islamic banks, according to the report","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2024\/6\/.df3dbfba-bbf0-4f5d-a057-23014f86ea5d.mp3"},"yoast_head":"\nLocal Islamic banks\u2019 standalone credit profiles set to remain robust next year, says Fitch Ratings - 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