The combined assets of Saudi Arabia’s banks swelled by nearly SR180 billion (Dh178 billion) in 2012 and the bulk of the increase was in credit to the domestic private sector and the government, according to official data.
From SR1,544bn at the end of 2011, the total assets of the Gulf Kingdom’s 12 banks soared to a record high of SR1,734bn at the end of 2011 to maintain their position as having the second largest assets base in the Middle East after UAE banks.
It was the biggest increase since 2008, when the assets rocketed by around SR227bn, showed the figures by the Saudi Arabian Monetary Agency (Sama).
A breakdown showed credit to the private sector jumped to around SR999bn from SR858bn, an increase of nearly 141bn. Loans to the government and semi government establishments grew to SR220bn from SR209bn while the banks’ “other deposits” with Sama surged to SR127.6bn from SR96.8bn.
At around 16.4 per cent in 2012, growth in the banks’ claims on the private sector 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 global fiscal distress, 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 since the peak profits in 2006.
The profits of about SR33.5bn (Dh33.2bn) were nearly 8.4 per cent above the 2011 net earnings of around SR30.9bn but the profit growth in 2012 was much slower than in 2011, when it stood at around 18.3 per cent.
Sama's showed last year’s net earnings were the second highest since 2006, when they peaked at around SR34.6bn due to credit boom and other factors.
The increase in profits followed negative growth ion 2008-2010 because of the 2008 global fiscal crisis and the ensuing debt default crisis in the Gulf Kingdom, the world’s top oil supplier and largest Arab economy.
Follow Emirates 24|7 on Google News.