Saudi banks witness 8 percent surge in Q1 earnings, reaching $4.97 billion

Saudi Arabia’s top 10 listed banks saw? their earnings surge in the first quarter (Q1) of 2024 by 8 percent to reach SAR18.65 billion ($4.97 billion), compared to the same period the previous year. This increase can be attributed to several factors, including an 11 percent growth in lending and a rising interest rate environment that has heightened the cost of credit.

According to data from the Saudi Central Bank, loans reached SAR2.67 trillion ($711.9 million) by the end of March, with a growth rate surpassing that of deposits, which increased by 8 percent.

Positive outlook for Saudi banks

Additionally, S&P Global forecasts robust credit growth for banks in the Kingdom, ranging between 8-9 percent in 2024. This expansion is expected to be driven by corporate lending, fueled by increased economic activities stemming from the Vision 2030 program.

Strong capital ratios, loan performance

Moody’s emphasized that Saudi Arabian banks anticipate a low nonperforming loan ratio and possess substantial loss-absorption capacity, with their capital ratios ranking among the highest in the Middle East region. Furthermore, there is anticipation that the Saudi government and its affiliated entities will inject deposits into the banking system, thus providing additional support for the credit expansion of financial institutions in the Kingdom.

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