Saudi Bank Stocks Tumble As Bailout Fails To Stem Liquidity Stress

Tyler Durden's picture

Saudi bank stocks' dead-cat-bounce - following the central bank's cash injection 'bailout - is dying once again as Bloomberg reports funding pressures remain in The Kingdom's financial system.

The interest rate banks charge one another for loans rose by the most since August on Sunday, extending a trend that’s slowing earnings and corporate borrowing in the world’s biggest oil exporter. The increase is defying the central bank, which has sought to ease the cash crunch by relaxing lending limits, offering new borrowing facilities and injecting funds into the financial system, including 20 billion riyals ($5.3 billion) pledged Sept. 25.

Financial institutions in the Arab world’s largest economy are bearing the brunt of a halving of oil prices since 2014. Economic growth in the kingdom is slowing, curtailing bank deposits just as the government increases borrowing to help plug a budget deficit that last year was the widest since 1991.

 

“Rates won’t easily come down with one $5 billion injection,” said John Sfakianakis, director of economic research at the Gulf Research Center Foundation in Riyadh.

 

“Bringing them down would require a significant liquidity injection effort. The $5 billion is a good step forward, but given the asset size of Saudi banks it would require several additional injections.”

And it appears investors are rapidly realizing that (as the market demands more)...

 

Saudi Arabia will post a budget deficit of 13.5 percent of economic output this year, the highest since 1992, declining to 9.6 percent in 2017, according to forecasts from the International Monetary Fund. Amid the shortfall, direct local government debt climbed to $63 billion at the end of August from almost $38 billion at the end of 2015, according to information in the Saudi bond prospectus obtained by Bloomberg.

Rising Saibor rates reflect the “extent of the liquidity challenge in the banking system,” said Raza Agha, the London-based chief economist for the Middle East and Africa at VTB Capital Plc. “The outlook for government borrowing has risen sharply and even if next year’s deficit declines to perhaps 8 percent of gross domestic product, you’re still looking at deficit-financing needs of $56 billion.”

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Looney's picture

 

Here’s an Ad from a Saudi Bank:

Open a basic checking account at our branch and... dry-hump the bank manager’s goat.

Open a savings account or buy the bank’s stock and… fuck the bank manager all you want.

Looney   ;-)

Looney's picture

+24.9!!!

No Camel left behind???  ;-)

Looney

filmmaker's picture
filmmaker (not verified) Looney Oct 16, 2016 5:36 PM

My last pay check was $9500 working 12 hours a week online. My sisters friend has been averaging 15k for months now and she works about 20 hours a week. I can't believe how easy it was once I tried it out. This is what I do... http://tiny.cc/od70fy

PrivetHedge's picture

No it wasn't.
No she isn't.

Is that you, Hillary? 

Loftie's picture
Loftie (not verified) PrivetHedge Oct 16, 2016 9:00 PM

No, it's not Hillary. It's the Syndicate.
https://goo.gl/bFYusM

philipat's picture

Hey Loftie, previously known as mofio then santafe then Aristotle of Greece then Gargoyle then bleu then oops then most recently lance-a-lot. I see you have now introduced Jack McGriff (member for 1 week) to post complimentary responses to Loftie so I’m guessing that Jack McGriff will be your next name now that Loftie has been exposed? It also explains how you can now give yourself two upvotes instead of the previous one? It also means you will be able to “Talk to yourself” again. I miss those old self-conversations between mofio, santafe and Aristotle of Greece but they do say that talking to yourself is the first sign of mental illness?

You are a serial spammer and a serial pain in the ass. Might I politely suggest that you go fuck yourself? And get a life.

PS. You might have noticed that my attempt to expose you for what you are is always the same. That’s because your Spam is always the same (Using fake links to your BS site which has no connection to your comments, which are deliberately dramatic to encourage people to click on the fake link) so it seems only fair that my exposure of your crap should also always be the same. An eye for an eye.

silverer's picture

Post her tax return, motherfucker!

OldFahrtyPants's picture

Wrong.

 

No camel's behind left behind

Dutti's picture

"Time to dump dollars?"

On the contrary.

However, it's not a bad time to also buy Goldminers.

 

Clock Crasher's picture

First Majestic me

 

..I like their PM finance company too.

Raffie's picture

Dump the dollar and get the price of PM up.

Paul Kersey's picture

I will cry my crocodile tears for those Saudi Royals who are losing money, and for the more than 24,000 Saudi-financed madrassas around the world that may lose some of their oil money financing.

Sudden Debt's picture

Hillary and Obama will be getting phone calls to speed up the show so they can start a war and push oil back over 120 dollars.

 

sinbad2's picture

The problem with that is the Saudi oil production will be zero, with the Persian Gulf closed.

The US is double crossing the Sauds, and arranging for the US to become the next global oil supplier.

The US hasn't been going around the world blowing up oil producing nations just for fun.

The Duke of New York A No.1's picture

Douche Bank can give them a loan and bail out.

NaiLib's picture

Better up, they do a special derivative deal letting Saudi Banks show billions in profits....Take that "profit" and buy Douche Bank

RU4Au's picture

Great idea! They can get five points on that loan and save the day for DB. Can't get that anywhere else outside of a title loan business. Works well for everybody. Wonder why they haven't thought of that?

Clock Crasher's picture

Super 64 you have smoke coming from your rotor.

Atomizer's picture

Camel racing bet to settle the derivatives market. 

SmedleyButlersGhost's picture

Come to think of it - has there ever been an Israeli bank stress test?  

SmedleyButlersGhost's picture

I was thinking more along the lines that it is impossible to have a true test since the tribe controls most of the banks of the western world. 

SirBarksAlot's picture

Arabs vs. Jews dance off (oldie but goodie):

https://youtu.be/-1weDjpXhCE

 

 

Atomizer's picture

That's why Israel is asking for United States of America aid. Fucking parisite's.

Eat shit and die ADL. You better hope a Clinton email doesn't show up. 

PrivetHedge's picture

Ha Ha.

When Saudi goes it'll be messy, their wahhabi monster will turn and rip them apart.

I can't wait.

silverer's picture

They need another big oil "surprise" to same them. If I had one wish, I'd wish that all the underground oil in the middle east would change into PCB's.

Tom Green Swedish's picture

ROFL.  All of the Middle East, Europe and Asia to tumble in ruins.  Say goodnight camelfuckers.

Cluster_Frak's picture

Camels and used ferraris are about to drop in price.

SirBarksAlot's picture

I never did buy into that story that they were responsible for maintaining the price of oil low to bankrupt the shale plays.  That was just a cover story so we wouldn't find out about ISIS, Turkey and the Rothschilds.  

And if it was true, it certainly wasn't a winning strategy.

The royal family has their hands in the till in SA.  They are living in another dimension.  The rich fuckers galore dimension. 

MaxThrust's picture

I dont think the Russians are in any hurry to help the Saudis.

Bring on the pain Mr Putin.

sinbad2's picture

The Saudis are finding out the truth of Kissingers words.

To be an enemy of America can be dangerous, but to be a friend is fatal.

SidSays's picture

https://twitter.com/wikileaks?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor

 

pre-commitment 3: UK FCO f33a6de5c627e3270ed3e02f62cd0c857467a780cf6123d2172d80d02a072f74

pre-commitment 2: Ecuador eae5c9b064ed649ba468f0800abf8b56ae5cfe355b93b1ce90a1b92a48a9ab72

pre-commitment 1: John Kerry 4bb96075acadc3d80b5ac872874c3037a386f4f595fe99e687439aabd0219809