Saudi Arabia’s banking sector is expected to record positive performance this year, despite the challenges of the pandemic, a KPMG report said.
Performance will be supported by government reforms, the sector’s success in halting expected credit losses, liquidity stability, and overall improvement in the capital adequacy ratio, Asharq Business reported.
“The banking sector in Saudi Arabia enjoys a strong base in the volume of liquidity and capital, and despite the COVID-19 pandemic, the demand for homes has witnessed a continuous increase, and the demand for real estate financing has doubled,” said Ovais Shehab, head of the financial services sector in Saudi Arabia at KPMG.
The Saudi banking industry showed its “solidity and cohesion” in the face of the challenges posed by the pandemic, the report said.
Eleven Saudi banks monitored by KPMG (excluding losses announced by the Saudi British Bank) reported a decline in net profit of 6.32 percent last year compared to 2019.
Total assets increased by 13.14 percent to SR2.771 billion compared to SR2.449 billion in 2019, while customer deposits rose by 9.18 percent to SR1.975 billion compared to SR1.809 billion in 2019.
Expected credit losses recorded a significant increase of 39 percent to SR17.33 billion, compared to SR12.46 billion in 2019.
The profitability of Saudi banks will surpass their GCC peers in 2021, despite low interest rates and the elevated cost of risk, Roman Rybalkin, associate director at S&P Global Ratings, told Arab News on March 11.
“After the shocks witnessed in 2020, the Saudi economy is expected to recover in 2021-2022 due to an increase in global demand for oil and increase of private consumption,” he added.
Saudi banking sector gets off to a positive start in 2021, says KPMG
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Saudi banking sector gets off to a positive start in 2021, says KPMG
- The Saudi banking industry showed its “solidity and cohesion” in the face of the challenges posed by the pandemic
- Total assets increased by 13.14 percent to SR2.771 billion compared to SR2.449 billion in 2019
Saudi Arabia raises $605m in January sukuk issuance: NDMC
RIYADH: Saudi Arabia’s National Debt Management Center has raised SR2.26 billion ($605 million) through its latest sukuk issuance.
Sukuk are Shariah-compliant financial instruments akin to bonds, granting investors a share in the issuer’s assets. Unlike conventional bonds, they comply with Islamic finance principles, which forbid interest-based transactions.
According to the NDMC, the January issuance was divided into five tranches. The first tranche was valued at SR410 million and is set to mature in 2031. The second amounted to SR338 million, maturing in 2033, while the third tranche, worth SR101 million, will expire in 2036.
The fourth portion, valued at SR523,000, is due in 2039, while the last tranche, due in 2041, was valued at SR1.42 billion.
The January figure represents a decrease of 67.64 percent compared to December, when the Kingdom raised SR7.01 billion from sukuk issuances.
In recent years, the Kingdom’s debt market has experienced swift growth, with investors increasingly turning to fixed-income instruments as rising global interest rates reshape the financial landscape.
This comes as the Gulf Cooperation Council sukuk outstanding climbed 12.7 percent to $1.1 trillion by the end of the third quarter of 2025, according to a recent Fitch Ratings report.
The US-based credit rating agency said debt capital market activity in the GCC is expected to remain strong into 2026, supported by a healthy pipeline of anticipated issuances.
The report noted that sukuk issuances increased 22 percent year on year in the first nine months of this year, accounting for 40 percent of total GCC DCM outstanding.
Sukuk also outpaced bond growth, which expanded 7.2 percent year on year.
Also known as Islamic bonds, these debt products allow investors to gain partial ownership of an issuer’s assets until maturity.
