MUST-READS

• Saudi banks to see stronger performance in Q1 2025: Fitch

  Saudi banks are set for a stronger start to 2025, with their asset-quality metrics expected to “remain strong” throughout the year, Fitch Ratings said in its latest report. The agency noted that lower interest rates helped boost Saudi bank’s net interest margins (NIMs) in Q4 2024, supported by strong lending growth. Fitch further stated, “We expect [Saudi banks’ lending growth] to continue outpacing Gulf peers' in 2025.” In Q4 2024, Saudi banks’ combined net income rose to SAR 21.5 billion, from SAR 20 billion in the previous quarter. This was driven by the rapid lending growth and lower cost of risk, “both underpinned by the healthy operating environment,” the agency added. Saudi banks’ total lending, according to Fitch, is estimated to grow by 12% in 2025. “Further interest rate cuts and stronger liquidity conditions should underpin banks’ growth appetite,” it wrote.

• Saudi banks banned from using WhatsApp for their communications with customers

  The Saudi Central Bank (SAMA) has decided to ban the use of instant messaging applications such as WhatsApp by the local banks for their communications with customers. SAMA noted that these applications are unreliable channels, according to Asharq Al-Awsat newspaper. SAMA's decision is based on the powers assigned to it and other related regulations, and out of its keenness to enhance the quality of practices and procedures followed by financial institutions subject to its supervision, in a way bringing the risks to the minimum. It is learnt that the Central Bank has asked financial institutions to examine the availability of alternative and secure channels such as benefiting from activating instant messaging services such as Live Chat or ChatBot, within the application, or the financial institution's website, taking into account compliance with the requirements for protecting personal data.

• Saudi banks optimistic on loan growth; limited financial stress in 2025

  Most banks in Saudi Arabia expect low double-digit to mid-teens growth in 2025, driven by corporate and mortgage lending, according to Al Rajhi Capital. Banks believe that their net interest margin (NIM) sensitivity has now reduced and expect minimal impact from rate cuts.  At the same time, they remain optimistic on the quality of loans and forecast limited financial stress, as their cost-of-risk guidance stays broadly in line with 2024, the brokerage said. The Saudi banking sector’s net profits grew by 21% year-on-year (YoY) and were 4% above consensus in the fourth quarter of 2024. Retail banks such as Al Rajhi Bank, Saudi National Bank, Bank Albilad posted a beat of 8%, while corporate banks reported a miss of 2% on consensus.

• Botero, Banksy Win Big in Sotheby’s Debut Saudi Auction

  The historical mud-brick city of Diriyah in Saudi Arabia played host to an unusual crowd on Saturday night: art aficionados, new collectors and first-time paddle holders melding together to take part in Sotheby’s inaugural auction in the kingdom. The offerings were as diverse as the crowd, with everything from high-end collectible watches to handbags, paintings, jewelry and sports memorabilia on sale to the highest bidder. In the end, it may have been Saudi Arabian businessman Amr Zedan who struck the most luck. Zedan, who had participated in Sotheby’s auctions on the phone prior to the event, won bids for two pieces, including the oil painting Society Woman by Fernando Botero for $1 million. A new art collector, Zedan said he plans to add the piece to a portfolio started with his wife.

• Saudi Banks’ Credit Quality May Weaken Due to External Funding Reliance

  The Saudi banking sector’s increasing reliance on external funding and resulting decline in net foreign assets (NFAs) could lead to lower funding and liquidity scores for some banks, Fitch Ratings says. A one-notch reduction in a bank’s funding and liquidity score would be unlikely, on its own, to directly affect the bank’s Viability Rating (VR) as the score’s weight is only 10%. However, weaker liquidity could eventually undermine other VR factors.

• Saudi banks’ T-bond investments fall to SAR 561.3B in July

  Saudi banks’ investments in treasury bonds declined by about SAR 1.9 billion month-on-month (MoM) to SAR 561.3 billion in July, data from the Saudi Central Bank (SAMA) showed.

• Five Saudi banks to finance cultural development fund

  Five Saudi banks have agreed to provide financing for a new arts fund managed by Saudi Arabia’s Cultural Development Fund, which has been leading government support for the arts since 2021.  The agreement with Al-Rajhi Bank, Alinma Bank, Banque Saudi Fransi, Arab National Bank and Bank Aljazira will provide support to private sector projects in the 16 areas covered by the fund, which include architecture, museums, film, fashion, music and poetry.

• SAMA Regulations Enhancing Saudi Islamic Banks’ Transparency, Sharia Governance

  Islamic finance-specific rules issued by the Saudi Central Bank (SAMA) over 2020–1H24 are enhancing Islamic banking regulations to some extent, says Fitch Ratings, through better transparency and reporting requirements, standardisation and sharia governance, and increased consumer confidence in the products’ sharia-compliance. While the Saudi Islamic banking market is the largest globally, and we expect the operating environment to be favourable over 2H24–2025, persisting issues include low standardisation, still-developing Islamic-finance regulations, and fragmented disclosures.

• Saudi Arabia’s big three banks continue their rankings ascent

  Saudi National Bank, Al Rajhi Bank and Riyad Bank maintain their first, second and third positions, respectively, in the national ranking based on Tier 1 capital. However, due to healthy core capital growth, all three institutions gain one place in the Top 1000 World Banks ranking, climbing to 63rd, 77th, and 126th, respectively.

• Saudi Arabia eyes digital banks, 24 IPOs in 2024: FSDP

  The Financial Sector Development Program (FSDP) announced in its annual report for 2023 the plans of Saudi Arabia’s financial institutions for 2024, including the Saudi Central Bank (SAMA) and the Capital Market Authority (CMA).

• 10 of 242 results1 2 … 25 >>