RIYADH: Saudi Aramco has awarded a deal worth SR149.8 million ($40 million) to Saudi Steel Pipe Co. for the supply of oil and gas steel pipes.
Saudi Steel Pipe expects to see financial impact from its new order in the second and third quarters of 2023, it said in a bourse filing.
In May, the pipe producer signed a 10-month contract worth SR97 million with Saudi Aramco to supply the latter with oil and gas steel pipes.
Meanwhile, in June it won a contract worth SR58 million to supply oil giant Aramco with steel pipes for oil and gas extraction
RIYADH: Saudi air carrier flynas has been awarded the Skytrax Award for Best Low-Cost Airline in the Middle East for the fifth time in a row.
The gong, handed out in a forum in London on Sept. 23, is based on a multi-month evaluation that includes more than 100 countries in the largest survey of its kind to measure passengers’ satisfaction in the world each year.
Bander Almohanna, CEO of flynas, said the award reflected his company’s commitment to operational excellence and meeting the aspirations of its traveling guests, in addition to achieving its growth and expansion strategy — which included launching more than 16 new destinations in 2022.
“The crowning of flynas for the fifth year in a row as the Best Low-Cost Airline in the Middle East with the Skytrax Award in the most important global forum for the aviation industry confirms our leadership as a national air carrier that raises the name of the Kingdom high on its National Day, and achieves the goals of Saudi Vision 2030 and the Strategy for the Civil Aviation Sector in KSA,” he said.
Flynas travels to more than 70 domestic and international destinations, and currently operates 38 aircraft — with plans to increase that to 52 by the end of 2023.
Almohanna added: “In addition, flynas Board of Directors approved to increase the purchase order for new aircraft to 250 aircraft, in an effort to participate effectively in achieving the Strategy for the Civil Aviation Sector in KSA, which aims to reach 300 million passengers and connect the Kingdom with 250 international destinations by 2030.”
RIYADH: Saudi Arabia’s new global airline RIA will be headed up by Etihad's Tony Douglas, Arabian Business reported citing industry sources.
Talks between RIA and Etihad’s CEO were announced on Sept. 8, and now Douglas has agreed to join the new airline after being in charge of UAE's national carrier since 2018.
He also served as CEO of Abu Dhabi Ports Co. between 2013 and 2015 and held senior positions with the British Airport Authority.
Douglas has nearly 20 years of experience in transportation, infrastructure and government sectors.
The Saudi Public Investment Fund has invested $30 billion in the new airline, which is expected to compete on global routes with Emirates, Etihad and Qatar Airways.
The initial launch phase is set to focus on regional routes, using Airbus A320s and Boeing 737Max planes.
Global consulting firm Korn Ferry has begun the process of finding a replacement, the sources said, while Douglas, as understood, has informed Etihad’s shareholders of his decision, but agreed to stay on until a replacement is found.
The Saudi PIF did not respond to requests for comment, Arabian Business said.
Etihad Airways has reached out to a number of current and former airline CEOs to gauge their interest in being considered for the top job at the carrier, should it become available, Bloomberg reported citing people familiar with the matter.
At least three senior aviation figures have been approached by a head-hunting firm, the people said, asking not to be identified for process confidentiality.
The people added that no employment offers have been made and any talks are preliminary.
An Etihad spokeswoman declined to comment, Bloomberg said.
RIYADH: The Central Bank of Egypt decided on Thursday to keep interest rates unchanged, in contrast to the move by the US Federal Reserve.
Fed chairman Jerome Powell confirmed on Wednesday interest rates would be raised 75 basis points, taking the policy rate to 3.0-3.25 percent — a 14-year high for the US.
Gulf countries including Saudi Arabia and the UAE responded by lifting their rates, but Egypt has decided to maintain its levels, with the CBE’s Monetary Policy Committee keeping the deposit rate at 11.25 percent and its lending rate at 12.25 percent, it said in a statement.
The committee pointed out that despite the high annual rates of inflation, monthly rates “recorded lower rates compared to the highest levels recorded during the months of March and April 2022.”
It also indicated that it will continue to assess the impact of its previous decisions to raise basic interest rates by 300 basis points during 2022, which “is still having an impact on the economy.”
The Monetary Policy Committee's report alluded to the relatively low global prices of some basic commodities, such as oil, as a result of “decreased demand due to expectations of a global recession.”
The CBE has also announced the percentage of cash reserves that banks are committed to maintaining has been increased from 14 percent to 18 percent.
Raising the mandatory reserve for banks is a measure aimed at absorbing liquidity in specific circumstances, and the last time it was used was in 2017, Asharq reported citing an official source in the CBE.
The source revealed that the average liquidity targeted to be absorbed from the money supply under the new measure is between 140 and 150 billion Egyptian pounds ($7.18 billion to $7.7 billion).
The source alluded to the trend of open market operations to absorb excess liquidity in the banking market, which is estimated at 600 billion pounds.
RIYADH: UAE's Nawah Energy Co. has successfully started Unit 3 of the Barakah Nuclear Energy Plant, located in Abu Dhabi's Al Dhafra Region, its parent company the Emirates Nuclear Energy Corporation announced on Thursday.
The launch has been achieved a year after the start-up of Unit 2, with the next key milestone being the connection of Unit 3 to the national electricity grid in the coming weeks, WAM reported.
Unit 3’s startup reflects the progress being made in bringing the four units of the Barakah Plant — the first multi-unit operational nuclear plant in the Arab World — online and accelerating the decarbonisation of the UAE’s power sector on the way to Net Zero by 2050.
ENEC CEO Mohamed Ibrahim Al Hammadi said: “Thanks to the data-driven decisions of the UAE’s wise leadership, Barakah is now spearheading domestic energy security and sustainability in parallel, at the time of a global energy crisis, highlighting the unique capabilities of nuclear energy in solving energy security and sustainability in parallel.”
He added: “The commissioning of the plant is just the beginning, with innovation and R&D (research and development) now key in ensuring the realization of the full scope of the programme.”
Once commercially operational Unit 3 will add another 1,400 MW of zero-carbon emission electricity capacity to the national grid.
This will be a major boost for UAE energy security, and a major step forward in tackling climate change.
Barakah is generating clean energy that is sustainably powering homes, business and high-tech industries across the UAE, WAM said.
Unit 3 will be connected to the national electricity grid in the coming weeks, and the operations team will continue with the process of gradually raising power levels, known as Power Ascension Testing.
The process will be continuously monitored and tested until maximum electricity production is reached and all regulatory requirements and the highest international standards of safety, quality, and security will be applied.
RIYADH: Gulf Cooperation Council banks are returning to form after a strong first half of 2022, with earnings for most of them reaching almost pre-pandemic levels by the end of the year, according to S&P Global Ratings.
This optimism is spurred by high oil prices, rising interest rates, supporting the banks' creditworthiness, along with new public-sector-backed projects, the agency said.
In the first half, margins slightly improved in most systems.
Saudi and Kuwaiti banks showed the strongest performance among the four largest GCC markets, with earnings already almost reaching pre-pandemic levels, while Qatari and the UAE banks are taking a bit longer to recover, according to the report.
In the second half of the year, higher net interest margins will likely offset an increasing cost of risk, leaving banks with stronger full-year profits than 2021.
The cost of risk will likely stabilize at normalized levels this year, partly due to adequate provisioning.
Still, some loans that benefited from support measures may turn nonperforming, S&P said.
GCC banks face a less certain 2023, with expectations of lower oil prices and risks to economic growth in the US and Europe.
As Saudi banks’ financial performance has almost recovered to pre-COVID-19 levels, S&P expects an average return on assets of 2 percent in 2022 compared with 2.1 percent in 2019.
Credit to the private sector expanded 8.5 percent over the first half, due to stronger-than-expected mortgage growth, owing to market saturation and a pick-up in demand for corporate credit driven by Vision 2030 projects.
Aggregated cost of risk remained low, at about 46 basis points, due to the strong economic rebound, and the share of Stage 3 loans remained broadly flat, estimated at about 2 percent.
Saudi banks’ non-performing loan coverage stood at 160 percent to 170 percent in 2022.
Higher credit growth momentum will continue into the second half of the year, mostly due to stronger-than-expected performance in the mortgage portfolio, according to S&P.
“We now expect credit growth to reach about 15 percent in 2022,” the agency said.
However, there is expectation that higher interest rates and market saturation will eventually curb mortgage origination.
S&P expects corporate lending to start contributing to loan growth, as the gradual increase in interest rates will continue to feed Saudi banks' margins, eventually pushing them up by year-end.
Still, the cost of risk is expected to somewhat increase over the second half to 70 bps-80 bps as some of the loans restructured post-pandemic are reclassified.
The systemwide ROA is set to stabilize at 1.9 percent to 2.1 percent from 2022.
The increasing risk of recessions in the US and Europe, along with higher interest rates, could pressure the operating environment in the Kingdom, especially if oil prices drop. Also, higher interest rates could result in a shift away from non-commission-bearing deposits, which may pressure banks' margins.
Higher interest rates and lower cost of risk in the UAE will support banking sector profitability, according to S&P Ratings.
Asset quality is also set to stabilize while the NPLs are expected to remain contained with the support scheme ending.
Banks' performance in the UAE improved in first-half 2022 due to lower cost of risk and higher interest rates, while the Central Bank of the UAE's COVID-19-related targeted economic support scheme also helped the system, limiting the increase in NPLs.
At the same time, the macroeconomic environment has started to improve driven by higher oil prices and recovery in the non-oil sector.
Better operating conditions led to higher lending growth in first-half 2202 compared with 2021, although this could be tempered by increasing interest rates in the second half.
Higher oil prices and the economic recovery in Kuwait have supported faster lending growth and lower cost of risk, creating a supportive environment.
Further reduction in cost of risk and higher lending growth of 9 percent year-on-year in the first half led to stronger banks' earnings.
Non-interest income continued to benefit from the improved operating environment, while higher inflation and the resumption of some costs as the pandemic wanes spurred a 10 percent increase in operating costs compared with the first half of 2021, offsetting the benefits from higher revenue.
Momentum may slow in the second half, with some NPL formation, according to S&P Global.
The Qatari private sector credit is set to grow by 5 percent in 2022, less than half the average rate seen over the previous three years, according to S&P Global.
The World Cup at the end of the year along with positive sentiment stemming from high natural gas prices will push consumption lending to strongest growth.
However, government construction projects have mostly been completed, which is shown in banks' first-half performance.
Overall credit could reduce slightly if lending to the government continues to decline in the second half, which the agency views as likely given the projected fiscal surplus of about 12 percent of GDP.