Standard & Poor's credit rating agency expected credit growth for Saudi banks at a rate ranging between 8% to 9% during the year 2024, but at a lower rate than last year, which witnessed growth of 10%.
The agency said in a report that real estate lending growth is expected to slow further in 2024 due to rising interest rates and market maturity.
She stated that the rapid rise in interest rates over the past months will lead to an increase in non-performing loans, expecting that the impact of this will be marginal as a result of companies enjoying controllable financial leverage, and that the asset quality indicators of Saudi banks are stable.
It is expected that the Saudi government and its related entities will continue to pump deposits into the banking system to support credit growth in banks, as the contribution of government deposits and government-related entities has risen to 30% of the total by 2023 compared to about 20% in 2020, expecting that these entities will continue to Injecting more deposits to support credit growth.
She pointed out that due to the large size of the Kingdom’s Vision 2030 investments and their long-term nature, the Saudi banking sector will not be able to meet financing needs, and therefore part of it will be through local and international capital markets, which will lead to increased exposure of Saudi banks to global liquidity conditions.
