Saudi Banking Sector Loans Soar to SR2.68 Trillion in April
In a stunning development, Saudi Arabia’s banking sector loans skyrocketed to a whopping SR2.68 trillion ($715.56 billion) in April, marking an impressive 11 percent surge compared to the same month in 2023, as per official data released.
Personal and Corporate Loans: A Breakdown
Figures unveiled by the Saudi Central Bank, also known as SAMA, revealed that personal loans accounted for 47 percent of the total lending, with corporate loans making up the remaining 53 percent.
Factors Driving Growth in Lending
The surge in loans can be attributed to the expansion of real estate projects under the Kingdom’s Vision 2030, along with a high demand for housing credit by expatriates. The digitalized and streamlined banking operations have also played a significant role in boosting both personal and corporate lending.
Personal Loans: A Closer Look
Personal loans, which include all forms of credit extended to individuals, totaled an impressive SR1.27 trillion, showcasing a 7 percent growth during this period. This increase can be linked to the Kingdom’s commitment to homeownership plans and various government-backed programs aimed at facilitating access to affordable housing options.
Corporate Loans: The Landscape
Among corporate loans, those granted for real estate activities dominated, accounting for 20 percent of the total and totaling SR278.86 billion. Loans for wholesale and retail trade closely followed, comprising 13 percent of corporate holdings, and reaching SR190.06 billion.
Future Outlook: The Rise Continues
According to a report by The Banker, Saudi Arabia’s financing growth is expected to maintain its upward trajectory, fueled by sustained demand for corporate and wholesale credit. The year 2024 holds promise as a potential turning point, with opportunities for direct lending to the country’s giga-projects on the horizon.
Growth Rates and Opportunities
In terms of growth rates, lending for professional, scientific, and technical activities saw the highest annual increase at 52 percent. Real estate credit within corporate activities followed closely, growing by 27 percent. Opportunities for banks to finally tap into the long-awaited giga-projects could signal a significant development in the region’s financial landscape.