Stability and sustainability of the biggest banks in any country are extremely important. When big banks become unstable and vulnerable,they typically stop lending. The resulting credit squeeze pushes the economy into recession or a slow growth path. The present studyexamines the financial stability and sustainability of the 30 large banks operating in the six Gulf Cooperation Council countries. Thesebanks represent 70% of the GCC banking market. Monte Carlo simulation was attempted assuming that key drivers can vary randomlyby twenty percent on either side of the current values. The conclusions are drawn based on 300 simulation trails of the five-year forecastbalance and income statement of each bank. Year 2020 is not favorable for the GCC countries because of the COVID-19 pandemic and lowoil prices, though the future years may be better. The study identifies several banks, which may become financially unsustainable becausethe simulations indicate the possibility of negative profitability, unacceptably low capital ratios and potential for heavy credit losses duringperiods of economic turbulence, which is the current situation due to the COVID-19 pandemic. Through simulation the paper is able tothrow light on which factors lead to bank instability and weakness.
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