Public-sector enterprises led Saudi credit growth as consumer signals cooled

Public-sector enterprises are driving Saudi credit growth. Bank lending to them jumped 21.5% y-o-y to SAR 285.1 bn in September, nearly three times the 7.3% rise in total bank credit, which reached SAR 3.5 tn, Sama’s monthly bulletin (pdf) shows. State-linked borrowing is carrying loan growth, while several private-demand signals cooled.

Banks’ government bond holdings climbed to SAR 678.1 bn from SAR 643.1 bn a year earlier, deepening the system’s tilt toward public-sector exposure.

Where the rest sits: Personal loans remain the biggest category at SAR 1.48 tn, ahead of real estate (SAR 435 bn), utilities (SAR 264.3 bn), wholesale and retail trade (SAR 224.3 bn), and manufacturing (SAR 212.9 bn).

Consumer and trade finance looked softer. New residential mortgage lending fell 5.7% m-o-m to SAR 5.5 bn, as contracts slipped to 9.7k from 9.8k; houses took the largest share at SAR 3.8 bn, ahead of apartments (SAR 1.5 bn) and land (SAR 241 mn). Import financing cooled as settled letters of credit for private-sector imports dropped 14.4% m-o-m and 18.2% y-o-y to SAR 12.3 bn, with new LCs down 6.2% m-o-m to SAR 14 bn.

Foreign-asset buffers slipped: The system’s net foreign assets fell to SAR 1.45 tn in September from SAR 1.52 tn in August, with Sama’s own down to SAR 1.66 tn from SAR 1.74 tn, while commercial banks’ net foreign-asset deficit narrowed to SAR 208.5 bn from SAR 217.3 bn.

ALSO- Broad money supply (M3) edged down 0.2% m-o-m to SAR 3.32 tn by the end of the month, with time and savings deposits (42.7%) narrowly ahead of demand deposits (42.3%). Commercial banks’ total assets rose to SAR 5.26 tn, a 6.7% y-o-y gain.