‎“Al-Rajhi Capital”: SAMA pumped about SR20 blns to address ‎liquidity situation in Saudi banks, mortgage loans declined for ‎this reason

Al-Rajhi Capital confirmed, “The credit growth in the Saudi banking system of +16% year-on-year is still strong, which was also seen during the financial reports for the third quarter of this year 2022 from banks, adding that despite the sharp growth In time deposits, however, the growth of total deposits is still less than the growth of credit. This explains the sharp rise in SAIBOR-LIBOR in October.

According to estimates by “Al-Rajhi Capital”, the Saudi Central Bank pumped some independent government deposits, to address the liquidity situation, and that the amount ranges between 15 and 20 billion riyals, adding that mortgage loans decreased in October compared to September. However, the average from the beginning of the year to date (10.7 billion riyals) is still higher than the estimated average of 10 billion riyals for the year 2022, indicating that there are slight upward risks for credit growth estimated at 15% on an annual basis in the year current and 12% on an annual basis in 2023

Mortgage loans amounted to 9.4 billion riyals for the month of October, slowing from 9.9 billion riyals in September due to higher interest rates affecting mortgages. The average from the beginning of the year to date was about 10.7 billion riyals (estimates for 2022 indicate 10 billion riyals).

According to the “Al Rajhi Capital” report, credit growth for October in the system remains strong, +0.7% MoM and +15.8% YoY (September: +1.1% MoM and +15.3% YoY). annual basis). Bank lending to the private sector grew by 0.8% m/m in October and 13.5% m/y (September: +1% m/m and +14% m/y).

In contrast, deposits grew +0.3% m/m and +9.8% m/y (September: +10.1% m/y), led by growth in time deposits (+11.2% m/m, +27.1). percent on an annual basis). Growth can be seen mainly coming from government deposits (+17.4% m/m), while private time deposits grew by 5.4% m/m.

She added that the rate of loans to deposits (simple) in the Saudi banking system was about 102.6% (September: 102.2%) in October, while the rate of loans to deposits (average) was about 82.1% (September: 81.9%). Liabilities between banks jumped to 101 billion riyals from 86 billion riyals in September, and grew by 18%, on a monthly basis.

Moreover, “Al Rajhi Capital” indicated that the total value of sales for points of sale (POS) increased by 17.8% year-on-year in October (+ 18.6% year-on-year in September). Meanwhile, cash withdrawals decreased in terms of value by 0.7% year-on-year in October (-0.7% year-on-year in September) to reach 46.8 billion riyals.

The profit before zakat and taxes for banks operating in Saudi Arabia for the month of October amounted to 6.1 billion riyals, +4% on a monthly basis and +32% on an annual basis (September: -11% monthly and -2% annually ).