KPMG: Despite increase in cost of funds and liquidity constraints, Saudi banking industry reported robust growth in 2022

KPMG: Despite increase in cost of funds and liquidity constraints, Saudi banking industry reported robust growth in 2022

Saudi Arabia - With the global banking industry making headlines in the past weeks, the Saudi banking sector published its annual results for 2022. According to KPMG, a leading provider of audit, tax and advisory services, in its annual market update, the consolidated numbers for the ten Tadawul-listed banks reflect a robust performance, particularly indicating an increase in net profit by 28%, reaching SR62.71 billion. The growth trajectory is expected to continue on account of consistent demand of public and private sector financing and availability of non-interest-bearing deposits.

The challenges faced by global banking sector faces were particularly heightened by shockwaves sent by the failures of Silicon Valley Bank and Signature Bank in the US and acquisition of Credit Suisse in Europe.

“During 2022 the total assets of Saudi banks grew 11.5% reaching to SR3,832 billion while deposits are up by 8.34% and closed at SR2,296 billion. We have seen the added liquidity requirements were fulfilled through Tier 1 capital and sukuk,” commented Ovais Shahab, Head of Financial Services at KPMG in Saudi Arabia.

Overall the banking industry has continued to capture benefits of economic expansion, evidenced by an increase in lending and reaching a loan-to-deposit ratio of approximately 95.5% at the end