Saudi banks’ money supply surges 10% to reach $726bn in January

The growth was primarily driven by a substantial rise in banks’ term and savings accounts, which recorded a rise of 31 percent to reach SR864.32 billion. File
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Updated 03 March 2024
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Saudi banks’ money supply surges 10% to reach $726bn in January

RIYADH: Saudi Arabia’s money supply surged 10 percent in January to reach SR2.72 trillion ($726 billion), the central bank data showed.

The growth was primarily driven by a substantial rise in banks’ term and savings accounts, which recorded a rise of 31 percent to reach SR864.32 billion. The overall figure, however, also includes currency outside banks, demand deposits, and other quasi-money deposits.

Since the Saudi riyal is pegged to the US dollar, the rise in interest rates is also seen as a source of motivation for depositors who want to pursue more profitable avenues particularly term deposits known for their higher-yielding nature.

Fitch Ratings also noted that the liquidity boost in Saudi Arabia could be linked to a significant rise in funds from government-related entities.

According to the agency, the rise in these GRE accounts suggests that these entities chose to invest their surplus liquidity in higher income-generating deposits with commercial banks, rather than with the Saudi Central Bank, also known as SAMA.

It highlighted that these deposits serve as an expensive source of funding for banks, which has significantly increased the average cost of funding due to heightened competition in the financial market.

Reflecting on the changes, demand deposits, which constituted a 53 percent share of the money supply a year ago, now stand at 48.42 percent, with a growth rate of only 1 percent during this period.

Despite the elevated cost of funding for Saudi banks, the increase in interest rates also bolstered profits on their asset side, as higher borrowing rates resulted in greater income.

Based on data from Bloomberg compiled by Arab News, the net income of listed Saudi banks surged by 12 percent annually in 2023, reaching SR69.96 billion.

Among these, the Saudi National Bank held the largest share at 29 percent, equivalent to SR20 billion. Notably, the most significant growth in net income was observed in Saudi Awwal Bank, with profits soaring by 45 percent to reach SR7 billion.

During 2022, SAMA increased key policy rates seven times followed by an additional four times in 2023. In its July 2023 meeting, the central bank last raised its repo rate by 25 basis points to 6 percent, reaching its highest level since 2001. This move was in line with the measures taken by the US Federal Reserve as part of its efforts to combat inflation.

Saudi Arabia has nevertheless demonstrated exceptional resilience and stability in managing inflation. This success can be attributed to the steadfast implementation of robust government policies designed to safeguard the economy.

Central to this stability is the Saudi Consumer Protection Association, a vigilant guardian of fair pricing practices for essential goods and services. The Kingdom’s strong regulatory framework ensures that consumers are shielded from unwarranted price escalations, fostering an environment conducive to business.

Furthermore, Saudi Arabia’s commitment to social welfare is evident in its comprehensive policies. The Kingdom has strategically invested in initiatives such as subsidies on essential goods, affordable housing schemes, quality education programs, and accessible healthcare services.

A prime example of this commitment is the Citizen Account Program, a cornerstone of support for low- and mid-income families. Through this program, the government provides crucial cash transfers, alleviating the financial strains caused by the rising cost of living.

In January, Saudi Arabia maintained stable inflation at 1.6 percent, holding steady from December 2023, as reported by the General Authority of Statistics.

The primary driver of the inflation rate was the cost of rent, given their significant weight of 21 percent in the Saudi consumer basket.

Nevertheless, according to data from Trading Economics, the Kingdom ranked the second-lowest among G20 countries in terms of inflation, following Switzerland, which recorded a rate of 1.3 percent.

Looking ahead, Fitch Ratings anticipates that the cost of funding will continue to be sensitive to shifts in the Fed rate. However, the agency expects the average net interest margin, a crucial measure of banks’ core profitability, to stay at approximately 3 percent.

Fitch also projects a 10 percent growth in deposits for 2024, driven primarily by term accounts. The proportion of demand deposits will likely decrease, falling below 50 percent of total deposits.

The agency’s predicted Saudi banking sector financing growth stood at 10 percent in 2024, well above the Gulf Cooperation Council average of 5 percent but down from an estimated 12 percent in 2023 and 14 percent in 2022.


Saudi Arabia looks to Swiss-led geospatial AI breakthroughs

Updated 12 December 2025
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Saudi Arabia looks to Swiss-led geospatial AI breakthroughs

  • IBM’s Zurich lab is shaping tools policymakers could use to protect ecosystems

ZURICH: For Gulf countries such as Saudi Arabia, AI-powered Earth observation is quickly becoming indispensable for anticipating climate risks, modeling extreme weather and protecting critical national infrastructure. 

That reality was on display inside IBM’s research lab in Zurich, where scientists are advancing geospatial AI and quantum technologies designed to help countries navigate a decade of accelerating environmental volatility.

The Zurich facility — one of IBM’s most sophisticated hubs for climate modeling, satellite analytics and quantum computing — provides a rare look into the scientific foundations shaping how nations interpret satellite imagery, track environmental change and construct long-term resilience strategies. 

Entrance to IBM Research Europe in Zurich (left); inside IBM’s hardware development lab, (top, right); and IBM’s Diamondback system. (AN Photos by Waad Hussain)

For Saudi Arabia, where climate adaptation, space technologies and data-driven policy align closely with Vision 2030 ambitions, the lessons emerging from this work resonate with growing urgency.

At the heart of the lab’s research is a shift in how satellite data is understood. While traditional space programs focused largely on engineering spacecraft and amassing imagery, researchers say the future lies in extracting meaning from those massive datasets. 

As Juan Bernabe-Moreno, director of IBM Research Europe for Ireland and the UK, notes, satellites ultimately “are gathering data,” but real impact only emerges when institutions can “make sense of that data” using geospatial foundation models.

r. Juan Bernabe Moreno, Director of IBM Research Europe for Ireland and the UK/(AN Photo by Waad Hussain)

These open-source models allow government agencies, researchers and local innovators to fine-tune Earth-observation AI for their own geography and environmental pressures. Their applications, Bernabe-Moreno explained, have already produced unexpected insights — identifying illegal dumping sites, measuring how mangrove plantations cool cities, and generating flood-risk maps “for places that don’t usually get floods, like Riyadh.”

The relevance for Saudi Arabia is clear. Coastal developments require precise environmental modeling; mangrove restoration along the Red Sea is a national priority under the Saudi Green Initiative; and cities such as Riyadh and Jeddah have recently faced severe rainfall that strained existing drainage systems. 

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The ability to simulate these events before they unfold could help authorities make better decisions about zoning, infrastructure and emergency planning. Today’s satellites, Bernabe-Moreno said, provide “an almost real-time picture of what is happening on Earth,” shifting the challenge from collecting data to interpreting it.

This push toward actionable intelligence also reflects a larger transformation in research culture. Major advances in Earth observation increasingly depend on open innovation — shared data, open-source tools and transparent models that allow global collaboration. “Open innovation in this field is key,” Bernabe-Moreno said, noting that NASA, ESA and IBM rely on openness to avoid the delays caused by lengthy IP negotiations.

Scientific posters inside IBM’s research facility showcasing decades of breakthroughs in atomic-scale imaging and nanotechnology. (AN Photo by Waad Hussain)

Saudi Arabia has already embraced this direction. Through SDAIA, KAUST and national partnerships, the Kingdom is moving from consuming global research to actively contributing to it. Open geospatial AI models, researchers argue, give Saudi developers the ability to build highly localized applications adapted to the region’s climate realities and economic priorities.

Beyond Earth observation, IBM’s Zurich lab is pushing forward in another strategic frontier: quantum computing. Though still in its early stages, quantum technology could reshape sectors from logistics and materials science to advanced environmental modeling. 

Alessandro Curioni, IBM Research VP for Europe and Africa and director of the Zurich lab, stressed that quantum’s value should not be judged by whether it produces artificial general intelligence. Rather, it should be viewed as a tool to expand human capability. 

 Dr. Alessandro Curioni, VP of IBM Research Europe and Africa & Director of IBM Research Zurich/ (AN Photo by Waad Hussain)

“The value of computing is not to create a second version of myself,” he said, “it’s to create an instrument that allows me to be super-human at the things I cannot do.”

Curioni sees quantum not as a replacement for classical computing but as an extension capable of solving problems too complex for traditional machines — from simulating fluid dynamics to optimizing vast, interdependent systems. But he cautioned that significant challenges remain, including the need for major advances in hardware stability and tight integration with classical systems. Once these layers mature, he said, “the sky is the limit.”

DID YOU KNOW?

• Modern satellites deliver near real-time views of Earth’s surface.

• Geospatial foundation models transform vast satellite datasets into clear, actionable insights.

• These tools can produce flood-risk maps for cities such as Riyadh, analyze how mangroves cool urban areas, and even detect illegal dumping sites.

Saudi Arabia’s investments in digital infrastructure, sovereign cloud systems and advanced research institutions position the Kingdom strongly for the quantum era when enterprise-ready systems begin to scale. Curioni noted that Saudi Arabia is already “moving in the right direction” on infrastructure, ecosystem development and talent — the three essentials he identifies for deep research collaboration.

His perspective underscores a broader shift underway: the Kingdom is building not only advanced AI applications but a scientific ecosystem capable of sustaining long-term innovation. National programs now include talent development, regulatory frameworks, high-performance computing, and strategic partnerships with global research centers. Researchers argue that this integrated approach distinguishes nations that merely adopt technology from those that ultimately lead it.

Inside IBM’s hardware development lab, where researchers prototype and test experimental computing components. (AN Photo by Waad Hussain)

For individuals as much as institutions, the message from Zurich is clear. As Curioni put it, those who resist new tools risk being outpaced by those who embrace them. Generative AI already handles tasks — from literature reviews to data processing — that once required days of manual analysis. “If you don’t adopt new technologies, you will be overtaken by those who do adopt them,” he said, adding that the goal is to use these tools “to make yourself better,” not to fear them.

From geospatial AI to emerging quantum platforms, the work underway at IBM’s Zurich lab reflects technologies that will increasingly inform national planning and environmental resilience. 

For a country like Saudi Arabia — balancing rapid development with climate uncertainty — such scientific insight may prove essential. As researchers in Switzerland design the tools of tomorrow, the Kingdom is already exploring how these breakthroughs can translate into sustainability, resilience and strategic advantage at home.