Saudi Arabia's Top Banks Maintain Steady Earnings Growth and Profitability Despite Global Headwinds
Alvarez & Marsal, a global professional services firm, reported that Saudi Arabia's top 10 banks have maintained steady earnings growth and profitability despite global headwinds.
In the first quarter of 2023, the collective net profits of these banks rose by 2.7% QoQ to reach SR17.3 billion ($4.61 billion).
The report attributed the boost in profitability to growth in non-core income and cost efficiencies, which increased the return on equity to 15.2% from 14.6% in the previous quarter.
The return on assets remained stable at 2%.
The report also noted that the higher interest rate environment may impact the cost of funding for some banks and slow down credit growth.
The analysis showed a 4.7% growth in deposits and a 3.2% rise in loans and advances.
Retail and corporate loans also witnessed a QoQ growth of 2% and 4.2%, respectively.
The net interest margin of the top banks remained stable at 3.08%, although slightly down from the previous quarter.
The report attributed the boost in profitability to growth in non-core income and cost efficiencies, which increased the return on equity to 15.2% from 14.6% in the previous quarter.
The return on assets remained stable at 2%.
The report also noted that the higher interest rate environment may impact the cost of funding for some banks and slow down credit growth.
The analysis showed a 4.7% growth in deposits and a 3.2% rise in loans and advances.
Retail and corporate loans also witnessed a QoQ growth of 2% and 4.2%, respectively.
The net interest margin of the top banks remained stable at 3.08%, although slightly down from the previous quarter.
