RIYADH: According to recently released data, the total profit of Saudi banks increased by 23.67 percent year over year to SR7.7 billion ($2.05 billion) in October. The Saudi Central Bank, or SAMA, claims that these numbers reflect profits before taxes and zakat. Banks reported a cumulative profit of SR73.28 billion from the start of the year to the end of October, up from SR64.47 billion in the same period the previous year.
The main cause of the rise in bank profits is a confluence of advantageous elements that emphasize the industry’s resilience and strength. A major turning point occurred in the third quarter of 2024, and non-interest income was crucial. Strong gains on securities and trading added SR1.4 billion to non-interest income, balancing increased finance impairment charges and helping to bring combined quarterly profits to SR20 billion, according to a November report from Fitch Ratings.
This increase came after SAMA decided to lower interest rates by 50 basis points in September, mirroring the US Federal Reserve’s move toward a more accommodating monetary policy. In the past, bank returns on loans were supported by the rising interest rate environment that dominated much of the Gulf region in recent years. This was because higher borrowing costs resulted in higher income from financing activities.
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