‎Saudi Arabia’s outlook underpinned by buoyant energy market, higher interest rates, increased consumer spending: A&M

‎Saudi Arabia’s outlook underpinned by buoyant energy market, higher interest rates, increased consumer spending: A&M

A buoyant energy market, interest rate hike, and increase in consumer spending bode well for a continued positive outlook for the Saudi banking sector, according to Asad Ahmed, Managing Director and Head of Middle East Financial Services at leading global professional services firm Alvarez & Marsal.

"We expect SAMA to continue matching rate hikes by the US Federal Reserve, which will help boost the sector’s net interest margins and reflect broad-based profitability improvements," Asad said in A&M report on Saudi banking pulse.

Saudi Arabia posted a budget surplus of $15.33 billion for the first quarter, which is well above the earlier estimates of $24 billion for 2022. This is the first surplus since 2014 and will have a positive economic impact, he added.

Saudi banks' aggregate profits rose by 23% in Q1 2022 to reach SAR 14.7 billion, compared to SAR 12 billion in the year-ago period, according to Argaam's data.