Saudi Arabia's Top 10 Banks: Earnings Surge by 8% in Q1 2024, Driven by Lending Growth and Robust Economy
In the first quarter of 2024, the top 10 listed banks in Saudi Arabia reported a 8% increase in earnings, totaling SR18.65 billion ($5 billion), due to a 11% growth in lending and a higher interest rate environment.
Loans in Saudi Arabia reached SR2.67 trillion by the end of March, growing faster than deposits which increased by 8%.
Central banks in the Gulf Cooperation Council reported that credit facilities continued to expand during the first quarter, despite higher interest rates, indicating the financial sector's resilience.
The text discusses the strong growth in lending in the Gulf Cooperation Council (GCC) region, which is a sign of economic expansion and investment.
Each country in the GCC experienced significant increases in lending, with a solid project pipeline leading to a 20.3% year-on-year increase in aggregate contract awards, reaching $45 billion in Q1 2024.
S&P Global predicts credit growth for Saudi Arabian banks to be between 8-9% in 2024, driven mainly by corporate lending due to increased economic activities from the Vision 2030 program.
Moody’s Investors Service has maintained a positive outlook for the Saudi Arabian banking sector.
Moody's endorsed the Saudi Arabian banking sector due to its economic diversification programs and growth in loans for low-risk government-backed projects.
These initiatives are expected to improve loan performance and lead to strong profits.
Saudi Arabian banks have a low nonperforming loan ratio and substantial loss-absorption capacity, with high capital ratios.
The Saudi government and its affiliated entities are anticipated to inject deposits into the banking system, providing additional support for credit expansion.
In the latest quarter, Saudi National Bank reported the highest earnings among the top 10 banks, with SR5.04 billion, followed by Al Rajhi Bank with SR4.41 billion.
Forbes' 2024 MENA (Middle East and North Africa) list of the 30 most valuable banks includes 10 banks from Saudi Arabia, accounting for one-third of the total.
Al Rajhi Bank topped the list with a market value of $96.6 billion, an increase of $21.7 billion over the past year.
Saudi National Bank followed with a market value of $68.2 billion.
Alinma Bank, representing only 7% of the total revenues, experienced significant growth with a 36% surge, reaching SR1.31 billion.
This growth was attributed to increases in net income from financing and investment, banking service fees, income from evaluating investments at fair value, and other revenue streams.
Saudi banks are expected to continue using international capital markets for funding due to the rapid growth in lending, particularly for new mortgages, according to S&P Global.
Despite the Saudi government and affiliated entities planning to deposit funds into the banking system, Saudi banks are projected to persist with this strategy for the next three to five years.
Central banks in the Gulf Cooperation Council reported that credit facilities continued to expand during the first quarter, despite higher interest rates, indicating the financial sector's resilience.
The text discusses the strong growth in lending in the Gulf Cooperation Council (GCC) region, which is a sign of economic expansion and investment.
Each country in the GCC experienced significant increases in lending, with a solid project pipeline leading to a 20.3% year-on-year increase in aggregate contract awards, reaching $45 billion in Q1 2024.
S&P Global predicts credit growth for Saudi Arabian banks to be between 8-9% in 2024, driven mainly by corporate lending due to increased economic activities from the Vision 2030 program.
Moody’s Investors Service has maintained a positive outlook for the Saudi Arabian banking sector.
Moody's endorsed the Saudi Arabian banking sector due to its economic diversification programs and growth in loans for low-risk government-backed projects.
These initiatives are expected to improve loan performance and lead to strong profits.
Saudi Arabian banks have a low nonperforming loan ratio and substantial loss-absorption capacity, with high capital ratios.
The Saudi government and its affiliated entities are anticipated to inject deposits into the banking system, providing additional support for credit expansion.
In the latest quarter, Saudi National Bank reported the highest earnings among the top 10 banks, with SR5.04 billion, followed by Al Rajhi Bank with SR4.41 billion.
Forbes' 2024 MENA (Middle East and North Africa) list of the 30 most valuable banks includes 10 banks from Saudi Arabia, accounting for one-third of the total.
Al Rajhi Bank topped the list with a market value of $96.6 billion, an increase of $21.7 billion over the past year.
Saudi National Bank followed with a market value of $68.2 billion.
Alinma Bank, representing only 7% of the total revenues, experienced significant growth with a 36% surge, reaching SR1.31 billion.
This growth was attributed to increases in net income from financing and investment, banking service fees, income from evaluating investments at fair value, and other revenue streams.
Saudi banks are expected to continue using international capital markets for funding due to the rapid growth in lending, particularly for new mortgages, according to S&P Global.
Despite the Saudi government and affiliated entities planning to deposit funds into the banking system, Saudi banks are projected to persist with this strategy for the next three to five years.
Translation:
Translated by AI