Arab Press

بالشعب و للشعب
Friday, Jun 20, 2025

Saudi banks on recovery path but mergers more likely after Covid impact

Saudi banks on recovery path but mergers more likely after Covid impact

Despite low interest rates, higher net interest income and reduced impairments drove double digit profit, of 20.3 percent, for the top 10 banks in Q3
Saudi Arabia’s banking sector did not escape the pandemic-induced downturn but with growth projections rising and loans and advances up, the industry is on the recovery path, according to consulting firm Alvarez & Marsal.

“Saudi banks have continued to grow their business and profit alongside asset quality control,” said Asad Ahmed, managing director and head of Middle East financial services, who co-authored its Q3 report on the kingdom’s banking sector.

However, despite the positive performances, quarter-on-quarter growth for most metrics in the third quarter of the year was lower than the previous quarter.

According to the report, in the face of low interest rates, higher net interest income and reduced impairments drove double digit profit growth of 20.3 percent for the top 10 banks in the kingdom in Q3 while liquidity is expected to remain sound for the rest of the year.

Total loans and advances of the top 10 Saudi banks grew by 2.8 percent quarter-on-quarter in Q3, and deposits grew by 1.2 percent quarter-on-quarter. Consequently, loan-to-deposit ratio increased from 90 percent last quarter to 91.5. Operating income grew 2.9 percent from the second quarter to the third.

To ease the prolonged stress that Covid-19 has put on many businesses, the Saudi Central Bank has extended its deferred payment program for small and medium enterprises until the end of 2021.

“Moving forward we anticipate that digitalisation trends and fintech opportunities will likely stimulate merger and acquisition activity in the sector. New digital banks are well-capitalised and will introduce positive competition among Saudi banks to provide customer-centric focused services and products and to optimise operating costs.

“Concurrently, the arrival of ‘Open Banking’, expected to be a part of the Saudi banking landscape in 2022, will allow customers to access financial services independent of their primary bank,” Ahmed said.

One of the most high-profile mergers is that of National Commercial Bank and Samba Financial Group, to create Saudi National Bank, which was completed earlier this year to create the largest bank in Saudi Arabia with over SAR896 billion ($239bn) in total assets and SAR127bn ($34bn) in shareholders’ equity at the time.

Saudi Arabia’s growth projection in the third quarter of 2021 increased to 2.8 percent, up from the International Monetary Fund’s June forecast.
Newsletter

Related Articles

Arab Press
0:00
0:00
Close
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
G7 Leaders Fail to Reach Consensus on Key Global Issues
Mass exodus in Tehran as millions try to flee following Trump’s evacuation order
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Netanyahu Signals Potential Regime Change in Iran
Analysts Warn Iran May Resort to Unconventional Warfare
Iranian Regime Faces Existential Threat Amid Conflict
Energy Infrastructure Becomes War Zone in Middle East
Iran Conducts Ballistic Missile Launches Amid Heightened Tensions with Israel
Iran Signals Openness to Nuclear Negotiations Amid Ongoing Regional Tensions
Shock Within Iran’s Leadership: Khamenei’s Failed Plan to Launch 1,000 Missiles Against Israel
UK Deploys Jets to Middle East Amid Rising Tensions
Exiled Iranian Prince Reza Pahlavi Urges Overthrow of Khamenei Regime
Wreck of $17 Billion San José Galleon Identified Off Colombia After 300 Years
Iran Launches Extensive Missile Attack on Israel Following Israeli Strikes on Nuclear Sites
Israel Issues Ultimatum to Iran Over Potential Retaliation and Nuclear Facilities
Coinbase CEO Warns Bitcoin Could Supplant US Dollar Amid Mounting National Debt
Trump to Iran: Make a Deal — Sign or Die
Operation "Like a Lion": Israel Strikes Iran in Unprecedented Offensive
Israel Launches 'Operation Rising Lion' Targeting Iranian Nuclear and Military Sites
Israeli Forces Intercept Gaza-Bound Aid Vessel Carrying Greta Thunberg
IMF Warns of Severe Global Trade War Impacts on Emerging Markets
Syria to Reconnect to Global Economy After 14 Years of Isolation
Saudi Arabia Faces Uncertainty Over Succession After Mohammed bin Salman
Israel Confirms Arming Gaza Clan to Counter Hamas Influence
Majority of French Voters View Macron's Presidency as a Failure
U.S. Reduces Military Presence in Syria
Trump Demands Iran End All Uranium Enrichment in Nuclear Talks
Iran Warns Europe Against Politicizing UN Nuclear Report
Businessman Mauled by Lion at Luxury Namibian Lodge
Paris Saint-Germain's Greatest Triumph Is Football’s Lowest Point
OPEC+ Agrees to Increase Oil Output for Third Consecutive Month
Turkey Detains Istanbul Officials Amid Anti-Corruption Crackdown
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
European and Arab Ministers Convene in Madrid to Address Gaza Conflict
Head of Gaza Aid Group Resigns Amid Humanitarian Concerns
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
Iranian Revolutionary Guard Founder Warns Against Trusting Regime in Nuclear Talks
×