https://arab.news/6ma9e
- The Saudi banking industry showed its “solidity and cohesion” in the face of the challenges posed by the pandemic
- Total assets increased by 13.14 percent to SR2.771 billion compared to SR2.449 billion in 2019
Saudi Arabia’s banking sector is expected to record positive performance this year, despite the challenges of the pandemic, a KPMG report said.
Performance will be supported by government reforms, the sector’s success in halting expected credit losses, liquidity stability, and overall improvement in the capital adequacy ratio, Asharq Business reported.
“The banking sector in Saudi Arabia enjoys a strong base in the volume of liquidity and capital, and despite the COVID-19 pandemic, the demand for homes has witnessed a continuous increase, and the demand for real estate financing has doubled,” said Ovais Shehab, head of the financial services sector in Saudi Arabia at KPMG.
The Saudi banking industry showed its “solidity and cohesion” in the face of the challenges posed by the pandemic, the report said.
Eleven Saudi banks monitored by KPMG (excluding losses announced by the Saudi British Bank) reported a decline in net profit of 6.32 percent last year compared to 2019.
Total assets increased by 13.14 percent to SR2.771 billion compared to SR2.449 billion in 2019, while customer deposits rose by 9.18 percent to SR1.975 billion compared to SR1.809 billion in 2019.
Expected credit losses recorded a significant increase of 39 percent to SR17.33 billion, compared to SR12.46 billion in 2019.
The profitability of Saudi banks will surpass their GCC peers in 2021, despite low interest rates and the elevated cost of risk, Roman Rybalkin, associate director at S&P Global Ratings, told Arab News on March 11.
“After the shocks witnessed in 2020, the Saudi economy is expected to recover in 2021-2022 due to an increase in global demand for oil and increase of private consumption,” he added.