Net foreign assets dips to SAR 1.5 tn in May

Net foreign assets in the Kingdom’s banking sector dropped slightly to SAR 1.5 tn in May from SAR 1.54 tn in April, according to the Saudi Central Bank’s monthly bulletin (pdf).

What drove the decline? The contraction was weighed down by both commercial banks and the central bank. Commercial banks saw their net foreign asset deficit widen to SAR 239.1 bn from the SAR 230.5 bn deficit they carried in April. Sama’s own net foreign assets slipped to SAR 1.74 tn from SAR 1.77 tn the previous month.

On the broader front, commercial banks saw total assets climb to SAR 5.14 tn by the end of May — up from SAR 5.08 tn in April, marking a 6.9% y-o-y jump. Total bank credit across all maturities hit SAR 3.39 tn, logging a 7.1% y-o-y increase.

Where did the money go? Personal loans continued to dominate the credit market with a total of SAR 1.46 tn, followed by corporate credit to real estate activities (SAR 408.4 bn), electricity, gas, and water supplies (SAR 234.9 bn), and wholesale and retail trade (SAR 217.7 bn).

Mortgages cooled off: Bank-financed residential mortgages dropped 30.9% m-o-m to SAR 4.4 bn in May, down from April’s SAR 6.3 bn. The decline was driven by a dip in new contracts, which fell to 6.5k from 9.6k the previous month.

Import financing took a hit: Settled letters of credit (LCs) financing private-sector imports fell 33.1% y-o-y to SAR 9.7 bn in May. Looking m-o-m, that’s a 23.7% slide from April’s SAR 12.7 bn.

The drivers: Building materials accounted for the largest share at SAR 2.3 bn, despite a 33.5% m-o-m decline. Other major categories included motor vehicles (SAR 1.5 bn), food items (SAR 1.2 bn), appliances (SAR 597 mn), and machinery (SAR 522 mn). All major categories posted monthly declines except machinery, which recorded a slight increase.

New LCs — our look-ahead for imports — totaled SAR 9.8 bn by the end of the month, down 9.8% m-o-m. This included SAR 1.9 bn for building materials, SAR 1.8 bn for motor vehicles, SAR 833 mn for food items, SAR 739 mn for appliances, and SAR 685 mn for machinery.

ALSO- Broad money supply (M3) edged up to SAR 3.37 tn in May, growing 8.9% y-o-y. Demand deposits made up 43.5% of the total, followed by time and savings deposits (39.5%), and other quasi-money deposits (9.3%). Total liabilities in the survey reached SAR 5.67 tn, up 5% y-o-y.

SOUND SMART- M3 is the broadest measure of money supply in an 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.

Government and quasi-government bonds sat at SAR 663 bn, a 6.4% increase compared to May 2025. Bank credit to public sector enterprises stood at SAR 253.8 bn, representing a 13.5% y-o-y jump.