Saudi domestic lending expected to remain strong says S&P

S&P expects credit growth momentum to continue this year and next. (AN)

• PIF to support construction sector
• Mortgage market to remain strong

RIYADH: Saudi domestic credit growth is expected to remain strong over the next two years after expanding by 14 percent last year according to S&P
The credit rating agency expects the Kingdom to witness credit growth of about 10 percent this year and next, Al Arabiya reported.
The well capitalized Gulf banking sector has helped companies and individual borrowers navigate through the last 12 months by boosting the availability of lending and offering payment holidays.
Saudi Arabia’s Public Investment Fund (PIF) is also involved in a number of initiatives which are expected to stimulate the growth of corporate credit, especially in the construction sector.
Plans to achieve Saudi Vision 2030 goals, and strong housing demand from citizens, is expected to support growth in retail loans and mortgages, S&P said.
It sees mortgage portfolios in the Kingdom increasing by about 30 percent annually over the next two years.
The credit ratings agency said that Saudi banks were well-capitalized by international standards, and it anticipates that rated banks’ capitalization will stay strong.