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Credit facilities in the Kingdom rose 12.2% y-o-y in 3Q 2024 — the highest growth rate in the GCC, according to a report from Kuwait’s Kamco Invest (pdf). This figure saw a 3.7% q-o-q increase to SAR 2.85 tn “backed by broad-based growth in almost all sectors in the economy.” Real estate credit grew by 7.7% q-o-q in 3Q, while the electricity, water, gas, and health services sectors saw a 7.5% increase. Loans for personal use, construction, and manufacturing grew an average of 2.7% q-o-q.
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Banks in the Kingdom recorded their highest q-o-q gross loan growth in nine quarters during 3Q, driven by robust lending across nearly all sectors. Gross loans for Saudi-listed banks rose by 3.7%, reaching USD 737.4 bn in the period. Bloomberg data revealed that asset yields for Saudi banks improved, supported by increased loans to SMEs, as well as growth in mortgage and fixed-rate balances. Additionally, short-term credit facilities surged by 15%, while medium- and long-term lending each increased by 8% during the quarter.
Domestic banks reported total customer deposits of USD 781.2 bn at the end of the quarter, reflecting 4.6% growth. This increase in deposits provides support to the Saudi banking sector, helping to mitigate potential liquidity challenges that could arise from the current lending trends. Without this growth, banks would likely need to depend on external funding to maintain liquidity, Kamco Invest says.
Saudi banks saw a slight q-o-q decline in their loan-to-deposit ratio, which stood at 92.8% in 3Q, down from 93.6% in 2Q.
The Kingdom recorded the highest q-o-q growth in total bank revenues at 6.2% followed by Qatar and Oman. UAE-listed banks also recorded healthy q-o-q growth of 3.9%.
The Kingdom scored the second-highest increase among GCC countries in terms of non-interest income. Domestic banks reported a strong q-o-q growth of 12.4% in non-interest income during 3Q. This contributed to the region-wide growth of 6.9%, a three-quarter high.
Ranking second in the GCC in terms of return on equity: Banks in the Kingdom also reported a stable Return on Equity (RoE) of 12.8% at the end of 3Q, matching the performance of Qatari banks. UAE-listed banks led the region with the highest RoE at 16.8%.
IN OTHER BANKING NEWS-
Saudi banks saw strong growth in credit and loan issuance during 3Q, with total banking credit seeing a 12.2% y-o-y increase to SAR 2.85 tn, driven largely by long-term loans, Al Watan reports, citing a Sama report. Despite rising interest rates weighing on categories like real estate, the overall growth points to a strong appetite for consumer financing.
Long-term loans were the largest loan category, accounting for nearly half of the total credit granted. It saw a growth of 10.5% y-o-y to SAR 1.35 tn, with regional projects landing contracts worth USD 54.2 bn during the same period. Short-term loans grew 12.6% y-o-y to SAR 1.1 tn, while medium-term loans saw the highest growth rate (16.9% y-o-y) at SAR 431.7 bn during the same period.
Personal loans grew 20.1% y-o-y to SAR 447.8 bn in the same period. Among personal loans, long-term loans had the highest growth rate at 27.3% to SAR 225.2 mn.
