According to data from the Saudi Central Bank, Saudi banks shown a noteworthy improvement in credit quality in the first three months of the year, with the non-performing loan percentage falling to 1.4 percent.
Stronger risk profiles are attributed to the bank’s numbers, which show a decrease from 1.7 percent in the same period in 2023. This highlights the banking industry’s commitment to sound financial procedures and efficient risk management. The bank is known as SAMA.
The percentage of a bank’s gross loans that are not producing income because the borrowers have not made scheduled payments for a predetermined amount of time—usually 90 days or more—is measured by the NPL ratio.
The fact that GCC banks prioritize lending highlights the importance of credit risks, which determine the probability of borrower default and hence mold the risk profiles of individual borrowers.
According to the agency, Saudi banks saw substantial lending growth from 2022 to 2023—roughly twice as much as the GCC average—thanks to rising government spending and robust non-oil gross domestic product development.
Despite this, the Kingdom’s loan portfolio is healthier and has fewer loans that are at risk of defaulting because of strict lending guidelines, efficient risk management techniques, and maybe less exposure to high-risk industries or borrowers.
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