Saudi Press

Saudi Arabia and the world
Wednesday, Feb 08, 2023

Saudi banks to prioritize liquidity needs for 2023, focusing on raising Tier-1 funds

Saudi banks to prioritize liquidity needs for 2023, focusing on raising Tier-1 funds

Banks in Saudi Arabia are expected to continue to prioritize their liquidity demands for the coming year despite enhanced earnings, through focusing on raising Tier I capital in the form of debt issuances, notably Sukuk, according to KPMG, a leading provider of audit, tax and advisory services in Saudi Arabia.
In the first nine months of 2022, issuances of $3.8 billion have been conducted and this is expected to grow in coming months as banks are fuelling the increased demand in the public and private sector.“An upsurge in Tier I capital issuance has been noted across the banking participants as banks are further strengthening their equity base,” commented Khalil Ibrahim Al Sedais, Office Managing Partner – Riyadh, at KPMG in Saudi Arabia.

The regulatory agenda is also ensuring a robust capital base through the implementation of Basel 4 as final rules have emerged. While the implementation was delayed due to the pandemic, global regulators are now pushing ahead for a ‘full and consistent’ framework implementation.

“Banks could face significant challenges as they refresh their Basel 4 programs,” said Ovais Shahab, Head of Financial Services at KPMG in Saudi Arabia, noting that banks in the Kingdom will need to ensure that they are well -prepared to achieve compliance within the required timelines of Saudi Central Bank (SAMA) in a cost-effective manner.

In its Q3 2022 ‘Banking Pulse’ report, KPMG highlighted the latest developments in the Kingdom’s banking sector.

An analysis of the nine-month financial performance of the banking sector reflected a robust industry performance, particularly highlighted by an increase in net profit by 26.21 percent year-on-year, to$12.33 billion (46.41 billion Saudi riyals) in the first nine months of 2022, with total assets rising 9.76 percent year-on-year to 3,329 billion riyals.

“We have witnessed continued growth in the economic activities during the nine-month period in 2022. While global supply chains have been under pressure due to challenges including geopolitical apprehensions, oil prices being consistently on the higher side has helped the Saudi economy to thrive and expand on its Vision 2030 ambitions,” Al Sedais added.

In the recent KPMG CEO Outlook 2022, business leaders worldwide noted that pandemic fatigue and economic factors, including the threat of rising interest rates and inflation, top the list of most pressing concerns today.

“As we look to the next three years, risks are more interconnected than ever; emerging technology rises as the top risk and greatest threat to organizational growth, while operational risk, regulatory changes and reputational concerns are the other risks jumping in priority,” Shahab added.

Furthermore, advancing digitalization and connectivity across the business is tied with attracting and retaining talent which is coming out as the top operational priority to achieve growth over the next three years. This focus may drive increasingly flexible working arrangements and mitigating the heightened cyber security threats.

“Towards the year-end, banks will continue to mitigate enhanced market risk due to volatility in the interest rate and resolve on disclosures of ESG and Basel reforms,” concluded Shahab.

Related Articles

Saudi Press
2 earthquakes in Turkey killed over 2,300 people
Powerful Earthquake Strikes Turkey and Syria, Killing More Than 1,300 People.
Turkish photographer Ugur Gallenkus portrays two different worlds within a single image. Brilliant work
Charlie Munger, calls for a ban on cryptocurrencies in the US, following China's lead
Shell reports highest profits in 115 years
EU found a way to use frozen Russian funds
First generation unopened iPhone set to fetch more than $50,000 at auction.
WARNING GRAPHIC CONTENT - US Memphis Police murdering innocent Tyre Nichols
Almost 30% of professionals say they've tried ChatGPT at work
Interpol seeks woman who ran elaborate exam cheating scam in Singapore
What is ChatGPT?
Bill Gates is ‘very optimistic’ about the future: ‘Better to be born 20 years from now...than any time in the past’
Tesla reported record profits and record revenues for 2022
Germany confirms it will provide Ukraine with Leopard 2 tanks
Prince Andrew and Virginia Giuffre Photo Is Fake: Ghislaine Maxwell
Opinion | Israel’s Supreme Court Claims a Veto on Democracy
Moonwalker Buzz Aldrin Gets Married On His 93rd Birthday
Who’s Threatening Israeli Democracy?
Federal Reserve Probes Goldman’s Consumer Business
China's first population drop in six decades
Microsoft is finalising plans to become the latest technology giant to reduce its workforce during a global economic slowdown
Saudi FM discusses Kingdom’s economy, oil, Iran and US ties in Davos
Israelis rally in three cities against Netanyahu legal reforms
China's foreign ministry branch in Hong Kong urges British gov't to stop the biased and double standards Hong Kong report
Tesla slashes prices globally by as much as 20 percent
1.4 Million Copies Of Prince Harry's Memoir 'Spare' Sold On 1st Day In UK
After Failing To Pay Office Rent, Twitter May Sell User Names
Lisa Marie Presley, singer and daughter of Elvis, dies aged 54
FIFA president questioned by prosecutors
Britain's Sunak breaks silence and admits using private healthcare
Saudi Arabia plans to use domestic uranium for nuclear fuel
Mohammed Bin Salman chosen most influential Arab leader of 2022
Hype and backlash as Harry's memoir goes on sale. Unnamed royal source says prince 'kidnapped by cult of psychotherapy and Meghan'
United Arab Emirates says it will teach Holocaust in schools
Saudi Arabia set to overtake India as fastest-growing major economy this year 
International medical experts speak out against COVID-19 restrictions on China
Google and Facebook’s dominance in digital ads challenged by rapid ascent of Amazon and TikTok
FTX fraud investigators are digging deeper into Sam Bankman-Fried's inner circle – and reportedly have ex-engineer Nishad Singh in their sights
TikTok CEO Plans to Meet European Union Regulators
France has banned the online sale of paracetamol until February, citing ongoing supply issues
Japan reportedly to give families 1 million yen per child to move out of Tokyo
Saudi Arabia’s female ambassadors: Who are the five women representing the Kingdom?
Almubarak named ‘The Best Central Bank Governor of the Year 2023 for the Middle East’
Hong Kong property brokerages slash payrolls in choppy market
U.S. Moves to Seize Robinhood Shares, Silvergate Accounts Tied to FTX
Effect of EU sanctions on Moscow is ‘less than zero’ – Belgian MEP
Dubai announces $8.7 trillion economic plan to boost trade, investment and global hub status
Coinbase to Pay $100 Million in Settlement With New York Regulator
FTX assets worth $3.5bn held by Bahamas securities regulator
A Republican congressman-elect is under investigation in New York after he admitted he lied about his education and work experience.