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Net foreign assets in the Kingdom’s banking sector inched down in July, reaching a surplus of SAR 1.4 tn by the end of the month, compared to SAR 1.5 tn in June, according to the Saudi Central Bank’s (Sama) latest monthly statistical bulletin (pdf).
Data breakdown: Sama’s net foreign assets ended July with a surplus of SAR 1.6 tn, the lowest level in four months and a notable decrease from June’s SAR 1.62 tn. Meanwhile, commercial banks saw their deficit widen to SAR 144.6 bn by the end of the month, a significant increase from the SAR 123 bn deficit reported a month earlier.
The total assets of commercial banks ticked up to SAR 4.8 tn by the end of July, compared to SAR 4.81 tn in the previous month, representing a 14.1% y-o-y rise. Bank credit across all segments increased 15.2% y-o-y to SAR 3.2 tn by the end of the month.
Personal loans continued to dominate credit, coming in at more than SAR 1.4 tn, followed by corporate credit to real estate activities with SAR 377.6 bn, wholesale and retail trade at SAR 212.9 bn, and electricity, gas, and water supplies at around SAR 204.2 bn.
MEANWHILE- Residential mortgages financed by banks went down 9.2% y-o-y to SAR 6.4 bn during the same period, with a total of 8.5k contracts.
Settled letters of credit financing private sector imports decreased 1.9% y-o-y to SAR 15.8 bn by the end of July. Around SAR 3.7 bn went to vehicles, while SAR 3 bn was allocated to building materials, SAR 839 mn for food items, SAR 698 mn for machinery, and SAR 447 mn for appliances.
New letters of credit — an indicator for future imports — also declined 13.6% y-o-y to SAR 12.9 bn by the end of the month. This included around SAR 2.4 bn for motor vehicles, SAR 1.6 bn for building materials, SAR 562 mn for food items, SAR 698 mn for machinery, and SAR 519 mn for appliances.
ALSO- Broad money supply (M3) increased 8.36% y-o-y to SAR 3.1 tn by the end of July. Demand deposits (46.5%) topped the list of currency supply components, followed by time and savings deposits (36.2%), other quasicash deposits (9.5%), and banknotes in circulation outside banks (7.8%). Meanwhile, total liabilities reached nearly SAR 5.4 tn, recording a 6.7% y-o-y increase.
SOUNDSMART- 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.
Gov’t bonds dip in July after steady gains: Government bonds slipped 0.75% m-o-m to SAR 631.5 bn by the end of the month, snapping 12 months of consecutive growth, but still up 12.5% y-o-y. Meanwhile, bank credit to public institutions increased 35.64% y-o-y to SAR 228.9 bn.
