Non-Performing Loans Net at Lowest Level of 1%
Banking sector indicators improved by the end of the first half, with non-performing loans dropping to 1% and the net interest margin stabilizing at 2.8%.
Translated by Qiyas from الجريدة — Original source
The ratio of net non-performing loans to total net loans fell to its lowest level at the end of the first half of the year, reaching approximately 1 percent, while the non-performing loan coverage ratio stood at 243.7 percent.
Net profit margin for the banking sector reached 38.6 percent by the end of the first half, with return on average equity at 10.7 percent and return on average assets at 1.4 percent.
The operating expense-to-total revenue ratio stood at 72 percent, while non-interest expenses relative to average assets amounted to approximately 1.5 percent.
Net interest margin at the end of the first half, which includes the ratio of net interest income to average interest-earning assets (AIEA)—comprising time deposits with the Central Bank, deposits with banks and other financial institutions, investments in government bonds, investments in fixed-income securities, and net loans—stood at 2.8 percent, remaining stable since the beginning of the year at the same level.
Banks continued to maintain strong financial figures from the start of the year, which has been exceptional in terms of conditions and challenges, reflecting the effectiveness of a consistently prudent approach that yields results during periods of stress.
Banking sources confirm that operating conditions are currently better in terms of opportunities, although the surrounding environment may be the most significant factor exerting pressure. Nevertheless, there is relative optimism, and banks’ operations continue to support the private sector and developmental opportunities.
