According to official figures, the banking sector in Saudi Arabia extended loans totaling SR2.72 trillion ($726.44 billion) in May, indicating an annual growth of 11.14 percent.
According to data made public by the Saudi Central Bank, or SAMA, growth rates for corporate credit, which made up 53% of all loans for the month, were greater than those for personal loans, which constituted the remaining 47%.
Despite high interest rates, McKinsey also stated in a June research that mortgage lending is a key driver of the banking sector’s rise in the Kingdom.
This coincides with rising oil prices, government efforts to diversify the economy, more government spending, and strong growth in the non-oil gross domestic product are all providing Saudi banks with significant growth prospects, according to Fitch Ratings.
As part of a larger trend to strengthen mortgage markets, the governments of the Gulf Cooperation Council are encouraging homeownership and improving residential finance, which will affect the retail loan portfolios of regional banks.
The company said that fintech and digital payments are driving the expansion of banking globally, and that artificial intelligence will transform asset management and banking in developed nations.
According to the SAMA study, personal loans, which include all forms of credit given to individuals, amounted to SR1.29 trillion, representing an annual growth of 7.3 percent.
corporate loans primarily went to real estate-related businesses; these loans made up 20 percent of the total and SR281.1 billion. This category experienced an annual growth of 24%.
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