{"id":103311,"date":"2025-12-24T00:00:00","date_gmt":"2025-12-24T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/?p=103311"},"modified":"2025-12-24T04:27:35","modified_gmt":"2025-12-24T04:27:35","slug":"sama-tightens-the-screws-on-bank-fee-income","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2025\/12\/24\/sama-tightens-the-screws-on-bank-fee-income\/","title":{"rendered":"Sama tightens the screws on bank fee income"},"content":{"rendered":"

Sama slashes banking, payment fees:<\/strong> The Saudi Central Bank (Sama) is capping administrative fees on consumer loans and slashing charges for digital transfers, a move that threatens a reliable revenue stream for the Kingdom\u2019s lenders just as they were leaning into non-funded income growth.<\/p>\n

The gist:<\/strong> The new circular halves the maximum admin fee banks can charge on non-real estate finance \u2014 capping it at 0.5% of the loan or SAR 2.5k. International transaction fees are now limited to 2% of the amount, while fees for international cash withdrawals (excluding the GCC Net) are now capped at 3% a maximum limit of SAR 25. Reissuance rates for Mada cards were also slashed.<\/p>\n

\n

Why it matters: The \"easy money\" buffer is shrinking<\/p>\n

The tightening comes at a precarious moment, as the banking sector\u2019s bottomline growth in the third quarter was heavily reliant on the very fees Sama just capped. With net interest margins compressing last quarter due to high funding costs, banks pivoted to fee generation to maintain growth.<\/p>\n

By the numbers: <\/strong>Non-interest income surged 7.5% q-o-q in 3Q, acting as the primary driver of the moderate 2.6% growth in net income, while core net interest income was virtually unchanged, according to Alvarez & Marsal\u2019s 3Q Banking Pulse<\/a> report. <\/p>\n

Capping admin fees forces banks to look elsewhere for growth<\/strong>. Banks will need to process more loans to make the same fee income. They\u2019ll also need to cut down on waste and optimize the efficiency of operations, as the cost-to-income ratio just became more essential for profitability.<\/p>\n

The customer mix will make a difference: <\/strong>Banks with the largest retail customer bases \u2014 think Al Rajhi and Saudi National Bank \u2014 will be more affected compared to banks focused on corporate clients.<\/p>\n

\n

The digital nudge<\/p>\n

The new rules nudge holdout customers \u2014 and banks \u2014 to cut down reliance on physical branches, charging just SAR 0.50 for transactions less than SAR 2.5k, and SAR 1 for transfers between SAR 2.5k and SAR 20k, while leaving a bigger room for charges on physical services. <\/p>\n

\n

\n

What\u2019s next?<\/strong> All financial institutions under Sama\u2019s purview have 60 days to apply the new fees.<\/p>\n","protected":false},"excerpt":{"rendered":"

Banks had pivoted to fee generation to maintain growth in 3Q<\/p>\n","protected":false},"author":1,"featured_media":103312,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[4693],"tags":[19,10,4696,4692],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-103311","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-big-story-today","tag-banking","tag-enterpriseam-ksa","tag-newslead","tag-the-big-story-today","wpautop","entry"],"acf":{"mongo_id":"5ef583ef-f7c4-424d-83b3-4e9bd076d539","order":"3","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2024\/8\/18.jpg","photo_position":"above","homepage_title":"","full_issue_title":"Sama tightens the screws on bank fee income","related_issue":[103306],"teaser":"Banks had pivoted to fee generation to maintain growth in 3Q"},"yoast_head":"\nSama tightens the screws on bank fee income - 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