{"id":89151,"date":"2024-08-29T00:00:00","date_gmt":"2024-08-29T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2024\/08\/29\/lending-from-saudi-banks-grew-3-1-in-2q-2024\/"},"modified":"2024-08-29T00:00:00","modified_gmt":"2024-08-29T00:00:00","slug":"lending-from-saudi-banks-grew-3-1-in-2q-2024","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2024\/08\/29\/lending-from-saudi-banks-grew-3-1-in-2q-2024\/","title":{"rendered":"Lending from Saudi banks grew 3.1% in 2Q 2024"},"content":{"rendered":"

Saudi banks registered 3.1% lending growth q-o-q in 2Q 2024<\/strong>, coming in second among its GCC peers behind the UAE, according to a Kamco Invest report (pdf)<\/a>. The growth was \u201cbacked by broad-based growth in almost all sectors in the economy,\u201d Kamco said, with outstanding credit facilities registering SAR 2.7 tn (USD 711.1 bn) during the quarter. <\/p>\n

Sector breakdown:<\/strong> Utilities \u2014 including electricity, water, gas, and health services) led the pack in terms of outstanding credit facilities, which grew 8.3% q-o-q in 2Q 2024, followed by real estate and building (+4.3% q-o-q) and construction (+4.0% q-o-q). <\/p>\n

Total customer deposits at Saudi-listed banks fell 0.5% q-o-q during the quarter<\/strong> to SAR 2.8 tn (USD 746.9 bn). The fall was led primarily by Saudi National Bank (SNB), where customer deposits fell 3.6% on a quarterly basis to SAR 656.3 bn. <\/p>\n

Emirati-listed banks also recorded a 16.9% return on equity (ROE), <\/strong>up from 16.7% in 1Q 2024, and posting a 160 bps y-o-y growth. Growth was driven by high net incomes and modest growth in shareholders\u2019 equity. <\/p>\n

Net interest margins came in at 3.2% in 2Q 2024<\/strong>, with net interest income at Saudi banks growing 2.5% q-o-q to USD 7.3 bn. \u201cIn terms of y-o-y growth at the GCC level, the growth in net interest income was strong at 7.6% reflecting elevated interest rates levels in the GCC, in line with most other global economies,\u201d Kamco said. <\/p>\n

Loan impairments were down: <\/strong>Saudi banks reported the second-lowest loan impairment rates among their GCC peers, with the banking sector\u2019s total impairments sliding to USD 0.49 bn during the quarter, according to Kamco. <\/p>\n

\n

THE REGIONAL PICTURE-<\/p>\n

GCC banks posted a record high of USD 14.8 bn in net income in 2Q 2024<\/strong>, rising 9.2% y-o-y and 2.6% q-o-q on the back of the sharp drop in loan impairments. GCC banks\u2019 aggregate ROE climbed to 13.6% in 2Q 2024, matching pre-pandemic levels and reflecting a 70 bps y-o-y growth. Saudi and Qatari banks followed the UAE in ROE growth at 12.8%, while Kuwaiti banks\u2019 ROE remained at 10.4%.<\/p>\n

After dipping 4.5% in 1Q, the regional banking sector saw a rise in operating expenses to <\/strong>one of the highest on record<\/strong>, inching up 0.8% q-o-q to USD 12.55 bn. The uptick was driven by a 7.5% expense hike in Saudi Arabia\u2019s banking sector to USD 4.2 bn.<\/p>\n

GCC banks\u2019 aggregate net interest margins held steady at 3.2% for the fifth consecutive <\/strong>month<\/strong>, signaling that it has peaked already as elevated interest rates over the past year are now fully priced in. <\/p>\n

With surging funding costs and anticipated rate cuts, net interest margins are expected <\/strong>to \u201ccome under pressure\u201d <\/strong>unless they were offset by \u201ccheaper sources of funding and continued growth in lending,\u201d according to Kamco.<\/p>\n","protected":false},"excerpt":{"rendered":"

Saudi banks\u2019 cost-to-income ratio improved to 38.2%<\/p>\n","protected":false},"author":1,"featured_media":89152,"comment_status":"","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":[2617],"tags":[19,10,296],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-89151","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-banking","tag-enterpriseam-ksa","tag-interest-rates","wpautop","entry"],"acf":{"mongo_id":"d38f7cc1-0dcc-48c3-993b-5440ffdc5af9","order":"6","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2024\/8\/2573.jpg","photo_position":"above","homepage_title":"","full_issue_title":"Lending from Saudi banks grew 3.1% in 2Q 2024","related_issue":[89140],"teaser":"Saudi banks\u2019 cost-to-income ratio improved to 38.2%","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2024\/8\/.c3e943aa-03dc-45d7-bd38-a7f52e14856c.mp3"},"yoast_head":"\nLending from Saudi banks grew 3.1% in 2Q 2024 - 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