Mubasher: Moody's Investors Service has changed the outlooks for the banking systems of Saudi Arabia, Kuwait, the UAE, Qatar, Oman, and Bahrain to stable from negative.

The New York-based rating agency noted that the Saudi Arabian banks will likely turn to more profitability amid the current surge in oil prices, according to a press release on Tuesday.

Meanwhile, the lenders in Oman and the UAE will maintain their steady profitable levels and solid capital buffers, while Kuwaiti banks will continue their recovery.

Profitability in Bahrain-based banks is expected to return close to pre-pandemic levels over the coming 12 to 18 months, given the current resilient funding, liquidity, and capital positions post the COVID-19 economic crisis.

Nitish Bhojnagarwala, VP-Senior Credit Officer at Moody's, said: "We have changed banking outlooks in GCC states as the jump in oil prices is boosting economic activity and economies are recovering after the coronavirus shock.”

Bhojnagarwala added: “Non-oil activities including tourism will also contribute to the improvement in some areas."