Aramco Attacks May Take Time to Trickle to Banks, Moody’s Says

(Bloomberg) -- It is too early to link the attacks on Saudi Aramco’s facilities to the kingdom’s banking system and the effects might take some time to trickle through, according to Moody’s Investors Service.

“We still don’t know,” Ashraf Madani, a senior analyst at Moody’s in Dubai, said in an interview in Riyadh on Tuesday. The outlook for lenders in the country is stable for the next 12-18 months, he said.

Read more: Aramco Faces Weeks or Months Without Bulk of Abqaiq Output

Record government spending will help fuel lending growth to about 4%-5% next year, Madani said. “Profitability in the system is solid,” he said. “We’re talking about a ratio of return on assets above 2%, which is very solid.”

Non-performing loans are also seen stabilizing at between 2%-2.5% over the next 12-18 months after several years of deterioration.

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