Net foreign assets in the Kingdom’s banking sector rebounded in May following a slight dip in April, reaching a surplus of some SAR 1.5 tn by the end of the month yet representing a 10.5% y-o-y drop, according to the Saudi Central Bank’s (Sama) latest monthly statistical bulletin (pdf).

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The rise was driven by an improved foreign asset position from Sama, whose net foreign assets rose to a surplus of SAR 1.63 tn by the end of the month, making up the bulk of the sector’s external position. This offset a drop in commercial banks, which recorded a deficit of just under SAR 129.9 bn.

MEANWHILE- Bank credit across all segments increased 16.3% y-o-y to SAR 3.2 tn in May. Personal loans once again accounted for the majority of all credit handed out by local banks during the month at SAR 1.4 tn, followed by corporate credit to the real estate sector, and financial, and ins. activities.

Residential mortgages financed by banks reached just under SAR 7.4 bn during the same period, down 3.9% y-o-y, with a total of just under 10k contracts. This includes SAR 4.9 bn for houses, less than SAR 1.8 bn for apartments, and SAR 534 mn for land contracts.

ALSO- Broad money supply (M3) grew by 9.4% y-o-y to SAR 3.09 tn. Demand deposits (48.6%) topped the list of currency supply components, followed by time and savings deposits (35.2%), other quasi-cash deposits (8.3%), and banknotes in circulation outside banks (7.96%). Meanwhile, total liabilities reached just under SAR 5.4 tn, recording a 6.9% y-o-y increase.

SOUND SMART- M3 is the broadest measure of money supply in a given economy. It includes banknotes, current accounts, and other money that can be quickly mobilized (what econ-nerds call M2) as well as large time deposits, institutional money market funds, short-term repurchase agreements, and larger liquid funds.

On the investment front: Government bonds rose for the 11th consecutive month to SAR 622.9 bn, up 0.95% m-o-m and 11.8% y-o-y, representing 73.6% of total public sector liabilities. At the same time, bank credit to public institutions increased 37.5% y-o-y to just under SAR 223.6 bn.

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