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MENA banks under strain of falling oil prices

Major banks in the Middle East and North Africa region, with deep links in Europe, are seen by rating agencies as coming under increasing pressure in response to the ongoing oil price decline.

Moody’s and Standard and Poors said the banks, with a few exceptions, are expected to tide over the cash crunch being created by falling oil prices and a general prognoses of a sustained low performance of the oil markets. But, they added, some banks will fare worse than others in the aftermath of last year’s oil price decline.

Many major MENA banks have international operations focused on London, Paris or Frankfurt or across Europe at large. The effect of the oil weakening price is likely to be felt across the board in those banks’ respective profiles. From a high of $107 a barrel oil prices crashed to $45 recently and, despite this week’s small recovery, no sustained bounceback appears in sight, analysts said.

Author: Editor

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