Fitch Report Forecasts Strong Performance for Saudi Arabian Banks in 2023 Despite Tighter Liquidity
Saudi Arabian banks are expected to perform well this year despite tighter liquidity, according to a recent report by credit rating agency Fitch.
The report highlights the favorable operating environment in the Kingdom as a key factor in supporting the profitability of banks in Saudi Arabia.
Non-oil economic growth in Saudi Arabia is seen as a major driver of profitability for banks in the Kingdom.
The government's ongoing Vision 2030 strategy, which aims to diversify the economy and reduce dependence on oil revenue, is supporting private sector growth.
This growth is reflected in the measures adopted by Saudi Arabia to successfully pursue its economic diversification goals, and move away from oil as a dominant revenue source.
The report further states that the growth of the private sector in Saudi Arabia will slow to 12 percent in 2023 compared to 14 percent in 2022, but will still be higher than the Gulf Cooperation Council counterparts which are expected to witness a growth of 5 to 6 percent this year.
Mortgage financing in Saudi Arabia reached SR567 billion ($151.1 billion) in the first quarter of 2023, with strong demand for mortgage financing, underpinned by a state subsidy program, has supported financing growth in recent years.
Fitch Solutions, the research arm of Fitch Ratings, recently predicted that Saudi Arabia's business landscape is expected to see a surge in investments from the pharmaceutical sector.
The growing demand for healthcare services and increasing fundraising activity in the industry are driving factors.
Pharmaceutical companies such as Novartis, Pfizer, Sanofi, Merck, and GlaxoSmithKline have already established a presence in Saudi Arabia through direct investment or partnerships with local companies.
Overall, the report paints a positive picture of the Saudi Arabian banking sector, highlighting the favorable operating environment and strong demand for financing as key drivers of performance.
Non-oil economic growth in Saudi Arabia is seen as a major driver of profitability for banks in the Kingdom.
The government's ongoing Vision 2030 strategy, which aims to diversify the economy and reduce dependence on oil revenue, is supporting private sector growth.
This growth is reflected in the measures adopted by Saudi Arabia to successfully pursue its economic diversification goals, and move away from oil as a dominant revenue source.
The report further states that the growth of the private sector in Saudi Arabia will slow to 12 percent in 2023 compared to 14 percent in 2022, but will still be higher than the Gulf Cooperation Council counterparts which are expected to witness a growth of 5 to 6 percent this year.
Mortgage financing in Saudi Arabia reached SR567 billion ($151.1 billion) in the first quarter of 2023, with strong demand for mortgage financing, underpinned by a state subsidy program, has supported financing growth in recent years.
Fitch Solutions, the research arm of Fitch Ratings, recently predicted that Saudi Arabia's business landscape is expected to see a surge in investments from the pharmaceutical sector.
The growing demand for healthcare services and increasing fundraising activity in the industry are driving factors.
Pharmaceutical companies such as Novartis, Pfizer, Sanofi, Merck, and GlaxoSmithKline have already established a presence in Saudi Arabia through direct investment or partnerships with local companies.
Overall, the report paints a positive picture of the Saudi Arabian banking sector, highlighting the favorable operating environment and strong demand for financing as key drivers of performance.