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Net foreign assets in the Kingdom’s banking sector dropped for the eighth consecutive month, reaching an SAR 1.48 tn surplus by the end of February — the lowest level in the last twelve months and a 7.4% y-o-y drop, according to the Saudi Central Bank’s (Sama) latest monthly statistical bulletin (pdf).
The continued decline was driven by commercial banks, whose net foreign assets fell to a SAR 52.5 bn deficit, down from SAR 59.4 bn in February 2024. Meanwhile, Sama’s foreign assets inched slightly down to SAR 1.53 tn by the end of the month, making up the bulk of the sector’s external position.
MEANWHILE- Bank credit across all segments increased 14.9% y-o-y to SAR 3.04 tn in February. Personal loans continued to account for the lion’s share of all credit handed out by local banks during the month at, followed by corporate credit to the real estate sector, and financial and ins. activities.
Residential mortgages financed by banks also hit SAR 8.9 bn during the same period, up 28.3% y-o-y, with a total of 11.8k contracts. This includes SAR 5.6 bn for houses, SAR 2.9 bn for apartments, and SAR 436 mn for land contracts.
ALSO- Broad money supply (M3) grew 10.1% y-o-y to SAR 3.03 tn. Demand deposits (48.5%) topped the list of currency supply components, followed by time and savings deposits (34%), other quasi-cash deposits (9.7%), and banknotes in circulation outside banks (7.8%). Meanwhile, total liabilities reached SAR 5.24 tn, clocking a 7.2% y-o-y growth.
SOUND SMART- M3 is the broadest measure of money supply in a given economy. It includes cash, 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 eighth consecutive month to SAR 606.5 bn, up 1.3% m-o-m and 10.9% y-o-y, representing 73.8% of total public sector liabilities. At the same time, bank credit to public institutions increased 37.4% y-o-y to SAR 214.8 bn.
