Net foreign assets’ surplus in the Kingdom’s banking sector narrowed in September to SAR 1.45 tn, compared to SAR 1.47 tn in August, according to the Saudi Central Bank’s (Sama) latest monthly statistical bulletin (pdf).

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The breakdown: Sama’s net foreign assets ended September with a surplus of SAR 1.6 tn, down from August’s hike of SAR 1.62 tn. Meanwhile, commercial banks saw their deficit shrinking to SAR 146.5 bn in September, from SAR 158.3 bn a month earlier.

The total assets of commercial banks ticked up to SAR 4.93 tn by the end of September, compared to SAR 4.92 tn in the previous month, representing a 12.6% y-o-y rise. Bank credit across all segments increased 14.3% y-o-y to SAR 3.3 tn by the end of the month.

Personal loans continued to dominate credit, coming in at more than SAR 1.45 tn, followed by corporate credit to real estate activities with SAR 363.9 bn, wholesale and retail trade at SAR 216 bn, and electricity, gas, and water supplies at around SAR 210.2 bn.

MEANWHILE- Residential mortgages financed by banks went down 14.7% y-o-y to just above SAR 5.8 bn during the same period, with a total of 8k contracts.

Settled letters of credit financing private sector imports decreased 4.1% y-o-y to SAR 15 bn by the end of September. Around SAR 2.1 bn went to vehicles, while SAR 2.8 bn was allocated to building materials, SAR 1.5 bn for food items, SAR 286 mn for machinery, and SAR 472 mn for appliances.

New letters of credit — an indicator for future imports — declined 14.5% y-o-y to SAR 15.5 bn by the end of the month. This included around SAR 2.6 bn for motor vehicles, SAR 1.7 bn for building materials, SAR 987 mn for machinery, SAR 494 mn for food items, and SAR 807 mn for appliances.

ALSO- Broad money supply (M3) increased 7.8% y-o-y to SAR 3.2 tn by the end of September. Demand deposits (46.6%) topped the list of currency supply components, followed by time and savings deposits (36.3%), other quasicash deposits (9.6%), and banknotes in circulation outside banks (7.5%). Meanwhile, total liabilities reached over SAR 5.5 tn, recording a 6.5% 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.

Gov’t bonds went up again in September: Government bonds grew for the second straight month in September to SAR 643 bn, marking an increase an 11.9% y-o-y. Meanwhile, bank credit to public institutions increased 35.3% y-o-y to SAR 235 bn.

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