Saudi Arabia’s Top Banks see 8% Earnings Surge to $5 Billion in Q1.

Saudi Arabia’s Top Banks see 8% Earnings Surge to $5 Billion in Q1.

RIYADH: Saudi Arabia’s top ten listed banks’ earnings increased by 8% in the first quarter of 2024, reaching SR18.65 billion ($5 billion), compared to the previous year’s period.

The increase in earnings can be attributed to a number of factors, including an 11% increase in lending and a rising interest rate environment that has raised credit costs.

According to the latest Saudi Central Bank data, loans totaled SR2.67 trillion by the end of March, outpacing deposits, which increased by 8%. Moody’s Investors Service reaffirmed its positive outlook for Saudi Arabia’s banking sector in March. This endorsement was based on the Kingdom’s economic diversification programs and increased loans for low-risk government-backed projects. These initiatives are expected to improve loan performance and contribute to solid profitability in the banking industry.

Moody’s emphasized that Saudi Arabian banks expect a low nonperforming loan ratio and have significant loss-absorption capacity. Furthermore, their capital ratios are among the highest in the Middle East. Despite representing just 7 percent of the total revenues of listed banks in the first quarter, Alinma Bank’s growth significantly contributed to the overall increase. It experienced a 36 percent surge compared to last year, reaching SR1.31 billion.

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