Dubai, June 14: Most Arab banks were insulated from the global financial crisis and generally able to weather the fallout, international ratings agency Moody’s said on Monday.
“One key factor is that… banks in the Arab world had minimal exposure to subprime-related asset classes or structured debt derivatives, and fewer still to troubled global investment banks,” Moody’s said.
Banks were also aided by “government support, and sometimes intervention,” it said.
The ratings agency maintains a stable outlook for most Arab banking systems, but noted its outlook is negative for those in Bahrain, Kuwait and the United Arab Emirates.
“These three banking systems have been the most affected by the liquidity drought, the sharp fall in asset prices… and the dramatic negative impact suffered by specialised institutions (like investment houses and real estate companies),” Moody’s said.
—Agencies