Saudi banks’ assets gain SR38bn in Q1

The combined assets of Saudi Arabia’s banks swelled by nearly SR38 billion (Dh37.7 billion) in the first quarter of 2013 to maintain their position as having the second largest financial base in the Middle East after UAE banks.

Official data also showed Saudi Arabia’s banks continued to open up their purses after a sharp slowdown in credit following the 2008 global fiscal distress and the ensuing debt default crisis that hit two major Saudi business conglomerates.

From SR1,734 billion at the end of 2012, the total assets of the Gulf Kingdom’s 12 banks soared to one of their highest levels of SR1,772 billion at the end March.

Growth followed a sharp rise in the banks’ assets through 2012, when they swelled by nearly SR180 billion. It was the biggest increase since 2008, when the banks’ assets rocketed by around SR227 billion.

Figures by the Saudi Arabian Monetary Agency (SAMA), central bank, showed credit to the private sector grew by around SR35 billion to SR1,034 billion at the end of March from nearly SR999 billion at the end of 2012.

Year-on-year, credit soared by about 15 per cent in the first quarter of 2013 while growth was nearly 16.4 per cent through 2012.

Growth in the banks’ claims to the private sector in 2012 was the highest since 2008, when it raced by nearly 27.2 per cent.

Lending sharply slowed down in the following two years because of the 2008 crisis, recording negative growth in 2009 and 5.5 per cent in 2010. It picked up to around 10.7 per cent in 2011 and maintained recovery through 2012.

Credit recovery was one of the main factors that enabled Saudi banks to record their second highest net earnings last year.

The profits of about SR33.5 billion (Dh33.2 billion) in 2012 were nearly 8.4 per cent above the 2011 net earnings of around SR30.9 billion but the income growth in 2012 was much slower than in 2011, when it stood at around 18.3 per cent.

SAMA’s report showed last year’s net earnings were the second highest since 2006, when they peaked at around SR34.6 billion due to credit boom and other factors.

The report showed deposits with Saudi banks also increased by nearly SR31 billion to peak at their highest level of SR1,291.8 billion at the end of March compared with around SR1,260.6 billion at the end of 2012.

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