Moody’s, the ratings agency, has warned of a build-up of systemic risk in banks operating in the Gulf as a result of rapid loan growth and “possible asset bubbles”.

A report by Moody’s to be released on Tuesday says the financial performance of Gulf banks has improved in recent years – and now compares favourably with those of higher-rated institutions in other parts of the world – thanks to booming economies underpinned by soaring world prices for oil and gas. In most cases this has made for a stable medium-term outlook.