Mohsin: Selective Across Saudi Banks

The video discusses the current state of Middle Eastern banks, focusing on the impact of rate hikes and economic conditions. It highlights opportunities in the banking sector, particularly in Saudi and UAE banks, due to not fully priced-in rate cycles. The discussion covers net interest margins, lending trends, and retail loan dynamics, emphasizing the strong economic backdrop in the Gulf region. The video also explores investor perspectives, foreign ownership levels, and the valuation of Middle Eastern banks compared to emerging markets.

What is the current narrative regarding peak rates in the Middle East?

• Rates are irrelevant to equity valuations.

• Rates are not fully priced in, creating opportunities.

• Rates are fully priced in at 4%.

• Rates are expected to decrease significantly.

How does the current economic backdrop in the Gulf affect concerns about rising rates?

• It has no effect on concerns.

• It leads to a focus on rate cuts.

• It reduces concerns due to strong economic momentum.

• It increases concerns due to low oil prices.

What is the relationship between net interest margins and bad loan provisioning in the Gulf?

• Net interest margins are expected to outperform.

• Bad loan provisioning will outpace net interest margins.

• Net interest margins are expected to underperform.

• There is no relationship between the two.

What is the impact of fixed-rate loans on Saudi retail lending?

• They result in decreased loan origination.

• They have no impact on lending trends.

• They cause a lagged impact of higher rates.

• They lead to immediate rate pass-through.

What trend is observed in Saudi mortgage loan growth?

• It is accelerating rapidly.

• It is decelerating slightly.

• It remains unchanged.

• It is declining sharply.

What is a key concern for institutional investors regarding Middle Eastern banks?

• The level of foreign ownership.

• The lack of loan growth.

• The decrease in commodity prices.

• The absence of economic momentum.

What is a major topic of debate among investors regarding Middle Eastern banks?

• The lack of economic growth.

• The decrease in foreign investments.

• The sustainability of current valuations.

• The impact of rate cuts.