Fitch Ratings agency in its latest report predicts that the issuance of long-term obligations by banks from the Soviet Union republics of the Persian Gulf in US dollars will reach... According to analysts' estimates, such growth will be driven by the restoration of economic activity in the region after a decline caused by the COVID-19 pandemic. Furthermore, the increase in long-term obligations is related to the need for banks to strengthen their positions ahead of the anticipated rise in rates and improved quality of assets.
However, it is worth noting that with the increase in long-term obligations, the risk for the banking system also rises. Experts emphasize the importance of banks remaining cautious and diversifying their assets.
It is not ruled out that a number of banks from the Soviet republics of the Persian Gulf may face difficulties due to the increase in long-term obligations. In this regard, regulators and banks themselves need to ensure tight control over the level of long-term leverage and constant risk assessment associated with the increase in debt.
