E-commerce share in Saudi Arabia’s retail sector to hit 46% by 2030: Visa official 

Ali Bailoun, regional general manager of Visa, during an interview with Arab News in Riyadh on Tuesday. AN photo by Loai El-Kellawy
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Updated 05 February 2025
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E-commerce share in Saudi Arabia’s retail sector to hit 46% by 2030: Visa official 

RIYADH: Saudi Arabia’s consumer retail spending is projected to experience significant growth in the coming years, with e-commerce expected to account for 46 percent of the overall retail sector by 2030, according to a Visa executive.

Speaking to Arab News at the Retail Leaders Circle in Riyadh on Feb. 4, Ali Bailoun, regional general manager of Visa, highlighted that Saudi Arabia currently represents 44 percent of the total retail spending in the Gulf Cooperation Council region.

Bailoun’s remarks reflect Saudi Arabia’s ongoing shift toward a more diversified, digitally-driven economy, where e-commerce plays a pivotal role.

E-commerce in Saudi Arabia

Earlier this month, data from the Ministry of Commerce revealed that Saudi Arabia’s e-commerce sector continues to show strong growth. As of the fourth quarter of 2024, the Kingdom now has 40,953 registered e-commerce businesses, marking a 10 percent year-on-year increase.

“In line with Vision 2030, we see Saudi growing or doubling the payment volume by 2030. Even if you look at e-commerce, we expect e-commerce to grow to 46 percent by 2030. So, we see growth and we see potential. And you can see this on the ground,” said Bailoun. 

He added: “Today, you can go anywhere in Saudi Arabia, and you can use your card and make any payments in any retail shop.” 

Bailoun noted that e-commerce in Saudi Arabia currently accounts for 29 percent of all consumer retail payments in 2024, and is projected to rise to 46 percent by the end of this decade.

He also highlighted that cross-border transactions represent 15 percent of consumer retail payments in Saudi Arabia for 2024.

Supporting these insights, a September 2024 report from Saudi Arabia’s Small and Medium Enterprises Authority indicated that the Kingdom’s retail sector is poised to double between 2020 and 2025, with an annual compound growth rate of 15 percent.

Furthermore, a December report from Statista projected that credit card penetration in Saudi Arabia will reach 46.83 percent, continuing a trend of growth observed over the past 15 years.

Technological advancements

Bailoun suggested that data should be used wisely by retailers to enhance the growth of cross-border business. 

“My recommendation always to retailers is data. You need to find a way to collect and optimize your data and then customize these solutions,” said Bailoun. 

He added: “You need to work with data, not only yourself. You need to look at the market. You need to look at the region and start building up on the data you have to customize the solutions or build up these solutions.” 

The Visa official further said that the implementation of advanced technologies like Artificial Intelligence is also crucial to elevate the growth of both physical and e-commerce retail sectors. 

“Today when you look at social media, sometimes you like something and you read more about it. Then it becomes it pops up in different areas. It is all AI,” he said. 

A recent report by market research firm IMARC echoed similar sentiments, emphasizing the growing role of technology in shaping the e-commerce retail sector.

According to the report, the increasing use of data analytics and AI algorithms to personalize shopping experiences is a key driver of the market. “The expanding use of data to recommend products based on a user’s browsing and purchase history is making it easier for customers to discover items they may be interested in,” the report stated.

IMARC also highlighted that Saudi Arabia’s e-commerce market was valued at $22.9 billion in 2024, with projections indicating it will reach $708.7 billion by 2033, reflecting a compound annual growth rate of 12.8 percent.

Visa’s Saudi operations

He also talked about Visa’s close cooperation with STC Bank, which recently received a non-objection certificate from the Saudi Central Bank to commence its banking operations in the Kingdom. 

“We are a payment technology network. We work and we enable all players in the ecosystem; be it a traditional bank, digital bank, a wallet, a merchant, or maybe a telco provider. We work and we operate and enable the whole ecosystem,” said Bailoun. 

He added: “STC was a wallet. They’ve converted to become a digital bank. We’ve been working with them when they were a wallet, we will continue working with them when they become a bank again. We enable them to do payment credentials, which means they can issue a card under the Visa brand, and they go and do payments anywhere and everywhere in the world.” 

Calling Saudi Arabia one of the strategic markets of Visa, Bailoun also outlined some of the major initiatives taken by the payment card services company in the Kingdom. 

In October 2024, Visa opened its fifth innovation center globally in Riyadh in the King Abdullah Financial District. 

“Today, if you have a problem statement. If you have anything you want to solve or cater for, we sit down together with many partners, we co-create and come up with a solution in that innovation center,” said Bailoun. 

He added: “In addition, we have some best practices and some experiences that we’ve taken from around the world; be it on the gaming, on AI or gen AI. We have something on urbanization. In the innovation center, we have also added something that will cater for the new cities the likes of Neom, the likes of Qiddiyah.” 

Bailoun also detailed Visa’s major partnerships in the Kingdom with retailers including Cenomi Retail and Marriot Bonvoy. 

“With Cenomi, we have signed a deal to work on two parts; the loyalty platform and we have also worked on something called co-brand. So, Cenomi will have a co-brand credit card. The more you spend on their card, the more loyalty you get, and then you can redeem within the group,” said the Visa official. 

He added: “Marriott Bonvoy is a group of hotels. It’s a loyalty platform, one of the big platforms globally. The card is issued in partnership with Visa and Bonvoy. So, the more you spend, the more you will get points to redeem in Bonvoy hotels.” 


PIF-backed AviLease delivers three A320neo aircraft to SDH Wings

Updated 18 March 2025
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PIF-backed AviLease delivers three A320neo aircraft to SDH Wings

RIYADH: AviLease, an aircraft leasing firm owned by the Public Investment Fund, has delivered three Airbus A320neo aircraft to SDH Wings.

SDH Wings is a joint venture between the Saudi firm and the Chinese sovereign fund, where the Kingdom holds a 10 percent stake.

According to a press release, the three new aircraft will be leased long-term to a Saudi-based airline. With this latest addition, SDH Wings now owns a total of 25 aircraft.

Launched in 2022 by PIF, AviLease was created to harness the potential of promising sectors within Saudi Arabia, aiming to drive economic diversification and contribute to the growth of the non-oil GDP.

“This delivery represents a significant milestone in our relationship with SDH Wings. We are proud to support their expansion with these state-of-the-art aircraft,” said AviLease CEO Edward O’Byrne.

This delivery also signals a new phase in the collaboration between AviLease and SDH Wings, following a broader memorandum of understanding to acquire 20 additional, predominantly next-generation aircraft.

Under this agreement, AviLease will further assist SDH Wings in expanding its fleet while strengthening its partnership with Sichuan Development International Holdings, the majority shareholder of SDH Wings.

“By leveraging AviLease’s expertise in leasing and financing modern, fuel-efficient aircraft, SDH Wings is well-positioned to capitalize on emerging opportunities in the aviation financing market,” said the press release.

In October 2024, AviLease acquired nine aircraft from global lessor Avolon, building on the successful purchase of 13 aircraft from Avolon in 2023.


Alphabet to buy cybersecurity startup Wiz for $32bn

Updated 18 March 2025
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Alphabet to buy cybersecurity startup Wiz for $32bn

NEW YORK: Google owner Alphabet will buy cybersecurity firm Wiz for $32 billion — in a deal set to boost the tech giant’s in-house cloud computing amid burgeoning artificial intelligence growth.

If closed, the-cash transaction, announced on Tuesday, will become Google’s most expensive acquisition in the company’s 25-year history. The purchase gives Google new momentum in its efforts to compete in the cloud-computing business by offering more security for its services.

“Wiz and Google Cloud are both fueled by the belief that cloud security needs to be easier, more accessible, more intelligent, and democratized, so more organizations can adopt and use cloud and AI securely,” Wiz CEO Assaf Rappaport said in a blog post.

The company says Wiz will join Google Cloud — and that this deal represents a company investment “to accelerate two large and growing trends in the AI era: improved cloud security and the ability to use multiple clouds.”

Google CEO Sundar Pichai said in a statement, Google Cloud and Wiz “will turbocharge improved cloud security and the ability to use multiple clouds.”

Assaf Rappaport, co-founder and CEO, added that the deal will “bolster our mission to improve security and prevent breaches by providing additional resources and deep AI expertise.”

Wiz, based in New York, was founded in 2020, makes security tools designed to shield the information stored in remote data centers from intruders.

Google has had its eyes on Wiz for some time. The purchase price announced Tuesday surpasses a reported $23 billion buyout proposal that Wiz rejected last July.

The proposed buyout will get a close look from antitrust regulators. While many expect the Trump administration to be more friendly to business deals, it has also shown skepticism of big tech.

Also, the new Federal Trade Commission Chair Andrew Ferguson has vowed to maintain a tough review process for mergers and acquisitions.


Closing Bell: Saudi main index closes in red at 11,792

Updated 18 March 2025
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Closing Bell: Saudi main index closes in red at 11,792

RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Tuesday, as it shed 90.64 points or 0.76 percent to close at 11,792.40. 

The total trading turnover of the benchmark index was SR5.94 billion ($1.58 billion), with 52 stocks advancing and 192 declining. 

The Kingdom’s parallel market, Nomu, also shed 315.76 points to close at 30,718.93. 

The MSCI Tadawul Index declined by 0.73 percent to 1,492.90. 

The best-performing stock on the main market was Aldawaa Medical Services Co. The firm’s share surged by 9.55 percent to SR78. 

The share price of Saudia Dairy and Foodstuff Co. also increased by 3.70 percent to SR313.60. 

Walaa Cooperative Insurance Co. also saw its stock price edging up by 3.62 percent to SR19.48. 

Conversely, the share price of Fawaz Abdulaziz Alhokair Co., also known as Cenomi Retail declined by 7.21 percent to SR11.84. 

On the announcements front, Derayah Financial Co., which debuted on Saudi Arabia’s main market on March 10, said that its net profit for 2024 reached SR443.9 million, representing a rise of 34.64 percent compared to 2023. 

The company attributed the rise in profit to significant growth across the company’s various business segments which include brokerage, asset and wealth management, as well as special commission income.

The share price of Derayah Financial Co. declined by 3.25 percent to SR38.70. 

Canadian Medical Center Co. announced that its net profit for 2024 stood at SR10.26 million, down by 34.63 percent from 2023. 

In a Tadawul statement, the firm said that the decline in net profit was due to higher operating and investment costs. 

Canadian Medical Center Co.’s board of directors also approved the payment of a cash dividend at 5 percent or SR0.05 per share for 2024. 

The company’s share price dropped by 0.58 percent to SR6.86. 

Elm Co. announced that its shareholders approved the firm’s acquisition of the shares held by the Public Investment Fund in Thiqah Business Services Co. for SR3.4 billion. 

The approval follows a share purchase agreement signed by Elm Co. and PIF in January to acquire the sovereign wealth fund’s entire stake in Thiqah, amounting to 45,000 shares. 

Elm Co. Saw its share price decline by 1.42 percent to SR971. 

Saudi Arabia’s Capital Market Authority approved the request of Marketing Home Group Co. to float 4.8 million shares in the Kingdom’s main market for an initial public offering. 

The offer shares amount to 30 percent of Marketing Home Group Co.’s share capital. 

The CMA also approved the application of Qudra Communications & Information Technology Co. to float 5 million shares, or 18.8 percent of the firm’s capital, on Nomu. 

Hawyia Auctions Co. also received approval from CMA to float 2.4 million shares, or 12 percent of the company’s capital, on Nomu. 

CMA added that the prospectus for these potential IPOs will be published well in advance of the offering’s start date. The authority’s approval is valid for six months from its resolution date.


How Saudi banks’ solid risk management counters liquidity pressures 

Updated 18 March 2025
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How Saudi banks’ solid risk management counters liquidity pressures 

  • Banks maintained profitability despite rising funding costs, fueled by intensified deposit competition and increased reliance on external borrowing
  • Alvarez & Marsal highlighted strong credit quality as a key factor supporting profitability in 2024

RIYADH: Saudi Arabia’s banking sector demonstrated resilience in 2024, supported by strong asset quality, improved cost efficiency, and disciplined credit management, according to Alvarez & Marsal. 

Arab News analysis of the A&M KSA Banking Pulse 2024 report found that banks maintained profitability despite rising funding costs, fueled by intensified deposit competition and increased reliance on external borrowing. 

This assessment relies on key financial ratios outlined in the report, including cost-to-income and loan-to-deposit, as well as net interest margin — indicators of how banks are navigating cost structures, liquidity pressures, and profitability. 

The A&M report came alongside a separate analysis from Fitch Ratings, which suggests that lower interest rates have had a mixed impact on earnings by banks in the Kingdom.

As Saudi Arabia accelerates economic diversification, the banking sector remains a key pillar of Vision 2030. Shutterstock

“Saudi banks’ performance metrics, particularly net interest margins, will see only limited improvement from the interest rate cuts that began in 2024, due to the prolonged tightening of liquidity conditions and strong competition for funding,” the agency said.

While rate cuts support loan growth, which boosts income from higher credit volumes, intense competition for liquidity is squeezing margins. Banks are reducing lending rates to stay competitive while maintaining attractive deposit rates to secure funding. 

Strong asset quality 

Alvarez & Marsal highlighted strong credit quality as a key factor supporting profitability in 2024. 

The non-performing loan ratio improved by 18 basis points to 1.1 percent, reflecting better risk management and healthier loan portfolios. Meanwhile, loan loss coverage remained solid at 161 percent, ensuring a strong buffer against defaults. The cost of risk also improved to 0.3 percent, indicating lower impairments and higher-quality lending. 

These improvements directly boosted bank earnings. Lower impairment charges allowed banks to retain more profits rather than setting aside funds for bad loans. 

With a larger share of performing loans and reduced provisioning costs, banks strengthened their bottom lines despite margin pressures.   

As Saudi Arabia accelerates economic diversification, the banking sector remains a key pillar of Vision 2030, driving financing for mega-projects, corporate expansion, and capital market growth. Banks are at the forefront of private sector investment, reinforcing their role as vital enablers of the Kingdom’s transformation. 

Beyond traditional lending, Saudi banks play a pivotal role in capital markets, contributing significantly to liquidity and investment activity. Banking stocks are among the most actively traded on the Saudi Stock Exchange, often driving market turnover. 

Saudi banks are also expanding their footprint in the debt market, with sukuk issuances and other financial instruments increasingly funding large-scale projects. 

Deposits rebounded by SR40 billion in January, fully offsetting the fourth-quarter drop. Shutterstock

Efficiency gains drive profitability 

Saudi banks demonstrated strong cost management in 2024, according to A&M, optimizing operational expenses while maintaining revenue growth. 

This resulted in a 63 basis point improvement in the cost-to-income ratio, which fell to 31.3 percent, reflecting greater efficiency in generating income relative to costs.  

The improvement reflects banks’ strategic focus on digital transformation, automation, and expense management — ensuring sustainable, long-term growth despite rising funding costs and liquidity pressures. 

Cost optimization efforts contributed to a 9.3 percent year-on-year growth in operating income, outpacing the 7.1 percent rise in operating expenses. This operational discipline boosted profitability, leading to a 13.5 percent rise in aggregate net income, reaching SR79.6 billion in 2024. 

Key contributors to this annual growth included a SR7.9 billion increase in net interest income, SR2.6 billion in net fee and commission income, and SR1.6 billion in other operating income, according to the report. 

However, net interest income growth slowed to 7.6 percent year-on-year in 2024, down from 11 percent in 2023, primarily due to higher funding costs.  

Despite narrowing net interest margins, banks leveraged rising fee-based income and cost efficiencies, maintaining a stable earnings outlook. The sector’s ability to navigate tightening liquidity while staying profitable underscores its strategic adaptability. 

Rising funding costs  

The rise in funding costs for Saudi banks is driven by both local liquidity constraints and global financial trends. As deposit growth lags behind credit expansion, banks are increasingly turning to alternative funding sources to sustain lending activity. 

A key factor behind this deposit gap is the dominance of government-related entity deposits, which account for about one-third of total sector deposits, according to Fitch Ratings. 

During the high-interest rate cycle, GREs moved funds into banks offering higher returns, rather than holding them at the Saudi Central Bank, also known as SAMA. 

Saudi banks play a pivotal role in capital markets, contributing significantly to liquidity and investment activity. Shutterstock

The introduction of SAMA’s deposit auction platform accelerated this shift, with GRE deposits at the central bank dropping from SR670 billion in 2023 to SR460 billion in early 2025. 

However, as rates began to decline, GRE inflows slowed. In the fourth quarter of 2024, Saudi banks saw a rare SR27 billion — or 1 percent — decline in deposits, the first drop since 2019, according to Fitch Ratings. The agency attributed this to seasonal budget and tax-related outflows from GREs.  

Despite this, deposits rebounded by SR40 billion in January, fully offsetting the fourth-quarter drop. 

While deposits recovered, their growth lagged behind lending expansion, which surged 14.4 percent year on year in 2024 — significantly outpacing the 7.9 percent rise in deposits, according to the A&M report. 

This pushed the loan-to-deposit ratio to 104.7 percent, surpassing the 100 percent mark for the first time in recent years.  

Corporate lending remains the primary driver, fueled by Vision 2030 mega-projects, infrastructure development, and private sector investments. 

With rising corporate financing needs, banks have diversified their funding sources, leaning more on sukuk issuances, external borrowings, and interbank lending to bridge liquidity gaps. While essential, these instruments come with higher costs than traditional deposits, pushing funding expenses higher.   

Impact of monetary policy  

The monetary policy shift has contributed to liquidity pressures. The US Federal Reserve’s 100 basis point rate cut in 2024 prompted SAMA to lower its repo rate to 5 percent, aligning with the riyal’s dollar peg. 

Despite this easing, funding costs remain high due to a lag effect — banks are still carrying higher-cost deposits and debt issued during the peak rate period. 

With loan growth projected to outpace deposits in 2025, Fitch forecasts banks will increase non-deposit funding, with debt issuance expected to exceed $20 billion. However, competition for liquidity and the dilution of current and savings accounts may offset the benefits of lower rates on net interest margins. Banks will need to carefully manage their funding mix to sustain profitability. 

Fitch also warned that tightening liquidity and increased reliance on external funding could pressure some banks’ funding and liquidity scores. However, a one-notch downgrade is unlikely to affect their overall Viability Ratings. 

As Saudi banks navigate these challenges, they are expected to focus on optimizing funding strategies, expanding capital market access, and leveraging long-term debt instruments to fuel lending growth while controlling funding costs.


$1.06bn deal signed to launch new logistics zone in Riyadh’s Falcon City

Updated 18 March 2025
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$1.06bn deal signed to launch new logistics zone in Riyadh’s Falcon City

  • Deal aims to strengthen the Kingdom’s position as a global logistics hub
  • Zone will serve as a comprehensive hub catering to the increasing demand for custom-designed warehouses

RIYADH: A new SR4 billion ($1.06 billion) logistics zone will be created within Falcon City in northern Riyadh, after a deal between Saudi firms SAL and Sela Co.

The development will provide integrated infrastructure combining Class A warehouses, multimodal connectivity, and smart logistics technologies to enhance supply chain efficiency and facilitate the faster movement of goods locally and regionally. 

The deal, which aims to strengthen the Kingdom’s position as a global logistics hub, is backed by the Private Sector Partnership Program, also known as Shareek.

The agreement comes as the Kingdom plans to invest more than SR1 trillion in the logistics sector by 2030, with the number of facilities already up by 267 percent since 2021.

Commenting on the Falcon City deal, Omar bin Talal Hariri, CEO of SAL, said: “The SAL Logistics Zone is not just a development project — it is a model for the future of integrated logistics services. 

“We are leveraging technology and sustainability to create an advanced operational environment that attracts investment and supports the Kingdom’s economic growth.” 

The partnership for the 1.5 million sq. meter logistics zone was signed in Riyadh in the presence of Minister of Transport and Logistics Services Saleh Al-Jasser, Minister of Investment Khalid Al-Falih, and CEO of the Shareek Program Center Abdulaziz bin Abdulrahman Al-Arifi, along with senior officials, investors, and business leaders. 

The zone will serve as a comprehensive hub catering to the increasing demand for custom-designed warehouses.

“Falcon City is more than just a development project; it is an integrated economic destination aimed at providing a modern business environment that supports multiple industries,” Rakan Al-Harthy, managing director of Sela, said.

He further emphasized that the partnership with SAL Logistics Services will facilitate the establishment of state-of-the-art facilities that cater to local and international companies and enhance business and investment flow.

This logistics zone significantly enhances the company’s capabilities due to its strategic location near King Khalid International Airport, major highways, and railway networks. 

Falcon City spans 14.4 million sq. meters and will feature the Riyadh Exhibition and Convention Center, as well as a modern logistics zone designed to attract major global companies, an aviation runway, and an aircraft maintenance hub.

The development also includes economic, commercial, and residential zones, as well as hospitality and entertainment areas and an outlet mall.

This strategic partnership directly supports Saudi Vision 2030 by enhancing logistics connectivity, stimulating local and international investments, and developing modern infrastructure to attract businesses and investors.

It also reinforces the Kingdom’s role in regional and international trade, driving sustainable economic growth and positioning the country as a leading logistics powerhouse.