Saudi Bank Financing Rises 79% Over Five Years; Non-Performing Loans Fall to 1.4%

Bank financing in Saudi Arabia surged by approximately 79% from 2019 to the first quarter of 2024, while the proportion of non-performing loans decreased to 1.4%, according to data from the Saudi Central Bank’s July 2024 statistical bulletin.

In 2019, the non-performing loan ratio was approximately 1.9%, rising to 2.2% in 2020 amid the economic impact of the COVID-19 pandemic. However, the ratio improved in subsequent years, falling to 1.9% in 2021, 1.8% in 2022, and 1.5% in 2023.

Total bank financing grew significantly from 1.2 trillion riyals in 2019 to 2.2 trillion riyals by the end of the first quarter of 2024. The increase was not only significant but also steady yearly: 1.4 trillion riyals in 2020, 1.7 trillion riyals in 2021, 1.9 trillion riyals in 2022, and 2.1 trillion riyals in 2023, indicating a stable and consistent growth pattern.

The International Monetary Fund’s 2024 Article IV consultation report not only highlighted but also praised the resilience of the Saudi financial sector. Stress tests conducted under the Financial Sector Assessment Program affirmed the sector’s robustness, with banks and non-financial companies demonstrating a strong capacity to withstand potential economic shocks, instilling confidence in their resilience.