RIYADH: Saudi Arabia’s largest lenders, including Saudi National Bank, Al Rajhi Bank and Riyad Bank, reported higher first-half earnings in 2026, driven by robust lending growth, resilient operating income and improving liquidity, bourse filings showed.
SNB, the Kingdom’s largest bank, posted a net profit of SR13.02 billion ($3.47 billion) in the first half of 2026, up 7.15 percent from the same period a year earlier.
Al Rajhi Bank reported the highest first-half profit among Saudi lenders at SR13.76 billion, marking a 14.15 percent year-on-year increase, while Riyad Bank posted net income of SR5.26 billion, up 3.54 percent.
Alinma Bank also reported strong results, with first-half net profit rising 6.24 percent year-on-year to SR3.27 billion.
Saudi banks have continued to benefit from strong credit demand as the Kingdom’s economic diversification drives lending across sectors including housing, infrastructure, tourism and corporate investment.
According to the Saudi Central Bank, total bank credit to the private sector reached a record SR3.2 trillion in May, up 16.2 percent year on year, underscoring the sustained expansion in financing activity that has supported earnings growth.
Commenting on this robust profitability among Saudi banks, Tony Hallside, CEO of STP Partners, told Arab News that banks in the Kingdom are increasingly demonstrating that sustainable profitability is built on more than interest rate cycles.
“The strong earnings reported across the sector reflect a combination of robust credit demand, particularly from projects linked to Vision 2030, improving liquidity conditions, disciplined risk management and continued investment in digital capabilities,” said Hallside.
Earlier this month, Bank Albilad reported a net profit of SR1.53 billion in the first half of this year, marking a 7 percent year-on-year increase, while Arab National Bank posted a net income of SR2.8 billion during the same period, up 5 percent.
Kapil Chadda, partner at Arthur D. Little, told Arab News: “One element that has contributed to the robust turnaround for the Saudi banks from the end of last year, when they were feeling the stress of exuberant growth, was in their liquidity buffers.”
He added: “This has eased with the slowdown of growth and thus allowing banks to hold greater liquidity and thus manage their balance sheets better.”
Factors driving profitability
Saudi banks’ first-half profitability continued to benefit from resilient operating income growth. Key drivers across institutions included higher net financing and investment income, gains from investments and trading, increased banking service fees, and stronger foreign exchange earnings.
SNB attributed its profit rise to a 5.8 percent year-on-year increase in total operating income, which reached SR20.2 billion. This was supported by 7.4 percent growth in net special commission income, a 3 percent rise in total investment gains, 2.9 percent higher fees from banking services, and a strong 20.8 percent jump in net exchange income.
Al Rajhi Bank reported a 13.9 percent expansion in total operating income, driven primarily by higher net financing and investment income, increased fees from banking services, and growth in exchange income.
“Banks in Saudi Arabia have become more robust with credit standards and capital accumulation, which has led to lower loan losses and greater profit retention. All of these factors combined have led to better-than-expected results for the first half of the year, with eye-watering return on equity for the likes of Al Rajhi Bank, which are some of the best in the world,” said Chadda.
Riyad Bank saw its profit supported by higher total operating income, led by net trading income, net special commission income, and dividend income. This was partly offset by lower net fee and commission income.
Alinma Bank posted a 6.6 percent rise in total operating income, mainly due to higher net income from financing and investment activities as well as fair value through income statement income. These gains were partially tempered by declines in fee income, exchange income, and other operating income.
“Rather than relying on one-off market factors, banks are benefiting from structural changes in the Saudi economy that are creating sustained demand for financing across infrastructure, tourism, housing and the private sector,” said Hallside.
He added: “That combination of financial strength and long-term investment positions the Saudi banking sector well for continued growth as the Kingdom’s diversification agenda advances.”
Dividend distribution
SNB said its board of directors approved an 11.5 percent cash dividend, or SR1.15 per share, after zakat for the first half of 2026.
Riyad Bank’s board of directors approved a cash dividend at 6.4 percent of capital, or SR 0.64 per share, for the first half of this year.
Alinma Bank said its board of directors decided to pay a cash dividend at 2.5 percent of capital, or SR0.25 per share after zakat, for the second quarter of 2026.
