Gulf banks may see rise in bad loans

Standard & Poor's has said that banks in the Gulf region could see further increases in non-performing loans, as defaults by two Saudi Arabian conglomerates and Dubai World's restructuring tarnish balance sheets, Bloomberg has reported. 'The cleanup of Gulf banks' loan portfolios has not yet come to an end,' the ratings company said. 'Starting from the second half of 2010 and assuming the economic recovery proceeds according to our expectations, we believe that asset quality for Gulf banks will likely bottom out before slowly improving.'