According to a report from S&P Global Ratings titled “The Energy Transition: GCC Banks On Stable Ground,” Gulf Cooperation Council (GCC) banks have maintained stable exposure to sectors most vulnerable to energy transition risks over the past three years.
However, the long-term creditworthiness of GCC banks will be impacted by the energy transition’s effects on oil and gas prices, as well as investor and customer appetite for finance, according to TradeArabia.
The report highlights that exposure to these sectors was approximately 12% of total lending on average at year-end 2022, with Omani and Qatari banks having the most significant exposure.
The report also noted that economic diversification and sustainability strategies offer opportunities for sustainable financing expansion, but oil and gas dependence remains high in the GCC region.
