Mubasher: Moody’s Investors Service assigned a stable outlook for GCC banking sectors in 2017, according to a Wednesday’s report.

The rating reflecting expectations that these sectors are resilient to persistent economic and funding pressures, the report revealed, further anticipating how bank creditworthiness will evolve in the GCC over the next 12-18 months.

"While operating conditions for banks in the Gulf Cooperation Council will remain challenging, the stabilization of oil prices -- albeit at a low level -- and resilient non-oil sectors will moderate pressures on the banking sector from slowing economic growth, fiscal reforms and spending cuts," said Olivier Panis, a Vice President at Moody's.

Asset quality across the region is forecast to remain solid with non-performing loan rations at 3-4% during 2017, according to the report.

Loss-absorption buffers are to stay robust with tangible common equity (TCE) ratios remaining broadly in the 12%-16% range and problem loan coverage high at around (+95%) all over the region.

In addition, profitability will likely to steady, in spite of a possible decline as a result of slowing credit growth, forecasting net interest margins to be at around 2-3%, with net income/tangible assets at around 1.5-2.0%, the rating agency highlighted.

“GCC governments' willingness to provide support to banks in case of need remains high, even if their fiscal capacity is facing pressure, which could result in more selectivity in their support to banks,” the report concluded.