Alvarez & Marsal releases Q3 2022 Saudi Arabia Banking Pulse

Alvarez & Marsal releases Q3 2022 Saudi Arabia Banking Pulse

- Aggregate net profit increased 9.3 percent quarter-on-quarter (QoQ)

- Loans and advances (L&A) growth continued to outpace deposits’ growth

Kingdom of Saudi Arabia – Leading global professional services firm Alvarez & Marsal (A&M) has released its latest Saudi Arabia (KSA) Banking Pulse for Q3 2022. The report suggests the top 10 banks in the Kingdom witnessed robust growth in profitability as net profit increased 9.3 percent QoQ resulting in a return on equity (RoE) of 14.8 percent in Q3’22. Profitability was underpinned by higher total interest income of 15.9 percent QoQ and lower impairment charges for the quarter of 15.4 percent QoQ.

In the third quarter, aggregate L&A grew by 2.9 percent QoQ and continued to outpace the growth in deposits 0.2 percent QoQ. The operating income increased by 4.9 percent QoQ, primarily driven by growth in total interest income mainly due to higher interest rates. The sector continued to see improvement in cost efficiency with decline in cost-to-income (C/I) ratio by 0.9 percent QoQ in Q3’22. The cost of risk (CoR) declined by 9bps QoQ to 0.4 percent due to reduction in impairment charges.

Furthermore, return on assets (RoA) improved 12bps QoQ as net profit grew faster than the underlying average asset