Deposit growth in Saudi banks supports lending, reduces need for bonds: Riyad Bank
The recent increase in Saudi bank deposits could help sustain strong lending growth, albeit at a slower pace than in recent years, according to a senior economist.
Speaking to Asharq, Naif Al-Ghaith, chief economist at Riyad Bank, said credit growth in the Kingdom slowed to 8 percent in March, compared with earlier peaks of 16 percent and 18 percent. Despite this, he stressed that the 8.7 percent deposit growth is providing banks with greater liquidity.
He also noted that credit quality remains high despite the repercussions of the Iran war, as reflected in a decline in the non-performing loan ratio across the banking system.
Al-Ghaith’s remarks came in response to a recent report by S&P Global, which forecast a slowdown in loan growth among Saudi banks amid a reprioritization of financing linked to Vision 2030 projects.
