High interest rates, tight liquidity weigh on Saudi banks

High interest rates, tight liquidity weigh on Saudi banks

Arabian Post Staff High interest rates and tight liquidity conditions have weighed on credit growth in Saudi Arabia’s banking sector, although it remained robust at 10% in 2023, S&P said in a report. Also, after strong growth over the past few years, new mortgage lending has slowed somewhat. At the same time, deposits have been lagging lending growth. Saudi banks will likely report strong-but-slower credit growth of […]

via High interest rates, tight liquidity weigh on Saudi banksArabian Post Staff

High interest rates and tight liquidity conditions have weighed on credit growth in Saudi Arabia’s banking sector, although it remained robust at 10% in 2023, S&P said in a report.

Also, after strong growth over the past few years, new mortgage lending has slowed somewhat. At the same time, deposits have been lagging lending growth.

Saudi banks will likely report strong-but-slower credit growth of 8%-9% in 2024 due to lower mortgage lending growth and tight liquidity. This compares with 10% credit growth reported on Dec. 31, 2023, which was in line with expectations, S&P said.  Corporate lending growth will benefit from Vision 2030 projects and the ensuing stronger economic activity, it added.

S&P said it expects mortgage lending growth to slow further in 2024 due