Saudi Arabia
Al Rajhi Capital, a leading financial services company in Saudi Arabia, reported that credit growth in the Saudi banking system is strong and corporate loans are one of its primary drivers going forward. However, the relatively modest growth in earnings (before zakat) indicates pressure. Ongoing financing costs.
According to data received from the Saudi Central Bank, the volume of mortgages amounted to 7.1 billion Saudi riyals, equivalent to 1.89 billion dollars, for the month of February, which is lower than the level recorded in last January, but it is slightly better than the financial company’s expectations of 6.8 billion riyals as a monthly average for the current year. Rising residential real estate prices have had a strong impact on mortgages.
According to the report, the company’s latest estimates for monthly mortgage creation for the year 2023 are 6.8 billion Saudi riyals, compared to the previously expected 7 billion Saudi riyals. It also indicated its expectations for loan growth in Saudi banks by 10% for the year 2023, with potential upside risks.
The report also indicated that the total deposit volume in February increased by 1.2% on a monthly basis, which is higher than the credit growth of 0.9%, which will relieve some pressure on the financing side going forward.
Report: Can Saudi banks maintain their level of profitability in 2023?