Saudi Arabian banks continued their strong performance in July, with aggregate profits reaching a record high of SR7.83 billion ($2.1 billion). This marks a 23% annual increase, according to the Saudi Arabian Monetary Authority (SAMA).
For the first seven months of 2024, total bank profits reached SR50.22 billion, up 13% from the same period last year. Deposits grew by 8% to SR2.64 trillion, with term deposits leading the way at 20% growth.
On the asset side, bank credit rose 12% to SR2.79 trillion. The loans-to-deposits ratio increased to 80.73%, indicating a healthy liquidity position.
Several factors have contributed to the banking sector’s expansion, including favorable economic conditions and strategic initiatives. High oil prices and government spending have created a robust operating environment, supporting the Kingdom’s ambitious development plans.
Fintech is also playing a significant role in transforming the sector. SAMA has been instrumental in regulating fintech, promoting innovation through initiatives like open banking and regulatory sandboxes.
High interest rates have boosted loan profits, but also intensified competition among banks. To differentiate themselves, banks are focusing on meeting the needs of young, tech-savvy consumers.
McKinsey’s research highlights the importance of positive customer experiences in driving financial performance. GCC banks are digitizing their customer journeys, leveraging AI and other technologies to enhance self-service capabilities and improve customer satisfaction.
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