Saudi Banking Sector Remains Resilient Despite Pandemic

Saudi Banking Sector Remains Resilient Despite Pandemic

The banking sector experiences a range of regulatory changes, including the value-added tax (VAT) reforms and the institutionalisation of the real estate transaction tax (RETT).

 

KPMG recorded these observations in its latest the "Banking Pulse“, a series of quarterly reports, highlighting the latest developments in the Kingdom's banking sector following the disclosure of third-quarter 2020 financials by listed banks.

 

"The lending space in the Saudi banking sector has been rife with continued growth in mortgage financing throughout the Covid-19 environment. It is an endorsement of the housing demand in the country and testament of government support measures,“ commented Khalil Ibrahim Al Sedais, Office Managing Partner - Riyadh KPMG in Saudi Arabia.

 

As per the latest available statistics, house ownership levels climbed well over 50% which was previously identified as a milestone point by the end of FY 2020 as part of the Vision 2030. In essence, the mortgage loan books across the banking sectors witnessed a period-on-period double-digit growth during the nine months ended September 30, 2020.

 

"Retail property buyers have welcomed the step-down of the tax rate from 15% back to 5% being a non-claimable component of the purchase cost in general. If these past trends are representative for the last quarter, then