Saudi Banks Witness 11% Increase in Loans, Reaching SR2.67 Trillion in March
In a recent report released by the Saudi Central Bank, also known as SAMA, it was revealed that Saudi banks’ loans reached a total of SR2.67 trillion ($711.5 billion) in March. This marked an 11 percent increase compared to the same month in 2023.
Real Estate Sector Takes the Lead in Borrowings
Personal borrowings accounted for 35 percent of the total loan growth, while the remaining 65 percent went to the corporate sector. The real estate sector, in particular, saw a surge in financing for activities such as real estate, electricity, gas, and water supplies. Real estate financing for corporate dealings experienced a significant increase of 27 percent in March, reaching SR275.2 billion.
Kingdom’s Real Estate Market Expected to Grow
A study by Mortor Intelligence estimated the Kingdom’s real estate market to be worth $69.51 billion in 2024, with projections to reach $101.62 billion by 2029. This growth is expected to be driven by a compounded annual growth rate of 8 percent between 2024 and 2029.
Expatriates and Government Initiatives Drive Residential Property Demand
The surge in real estate and construction projects has increased the need for debt-based financing, especially from the local banking sector. One factor contributing to this growth is the demand for residential properties from expatriates arriving in the Kingdom, along with government initiatives aimed at modernizing the financial system.
Key Sectors in Corporate Loans and Growth Rates
In addition to the real estate sector, lending for electricity, gas, and water supplies also saw a significant increase in corporate loans. Financing for professional, scientific, and technical activities soared by 54 percent, reaching SR6.4 billion. Education loans and financing for administrative and support service activities also showed robust growth rates.