Performance indicators of banks in Saudi Arabia should remain healthy this year despite tighter liquidity, as they capitalise on a favourable operating environment amid continued growth momentum in the Arab world’s largest economy, a report has found.
Expansion of the kingdom’s non-oil gross domestic product will help the lenders in further boosting their profitability this year, Fitch Ratings said in the latest report on the Saudi Arabia's banking sector.
“The average operating profit to risk-weighted assets of Fitch-rated Saudi banks was 2.7 per cent in 2022, and we expect non-oil economic growth to support profitability in 2023, driven by government capex, private-sector credit growth, lower unemployment and the government’s ongoing Vision 2030 strategy,” Anton Lopatin, senior director of financial institutions and banks at Fitch, said.
Saudi Arabia had the highest annual growth rate among the world’s 20 biggest economies in 2022 after its gross domestic product expanded 8.7 per cent on higher oil revenue and a robust non-oil private sector.
This year, the International Monetary Fund expects the kingdom's overall real GDP growth to moderate to 2.1 per cent. The World Bank has estimated 2023 growth at 2.2 per cent, as the kingdom caps oil output as part of its commitments to the Opec group of oil producers.
Business activity in the kingdom’s non-oil private sector economy remained robust last month as output and new business continued to expand, further supporting employment growth in the kingdom in the second quarter.
The reading for Saudi Arabia on the Riyad Bank purchasing managers' index rose to 59.6 in June, from 58.5 in May, well above the neutral 50-point mark that separates growth from contraction.
The annual inflation rate in Saudi Arabia also fell slightly to 2.7 per cent last month, from 2.8 per cent in May, according to official data.
Although Fitch expects private sector financing growth to slow to about 12 per cent this year from 14 per cent in 2022, it will remain above the GCC average of estimated 5 per cent to 6 per cent this year.
“Strong demand for mortgage financing, underpinned by a state subsidy programme, has supported financing growth in recent years,” Fitch said.
“Mortgage financing reached 567 billion Saudi riyals [$151.2 billion] at end-1Q23, with a compound average growth rate of 35 per cent over the past five years.”
The new quarterly mortgage issuance peaked at 49 billion riyals in the first quarter of 2021, but has since fallen to 23 billion in the first quarter of this year amid rising interest rates and market saturation.
“We expect further declines in 2023 and 2024 due to the recent reduction in state subsidies for mortgages,” Fitch said.
The rating agency said liquidity conditions in the kingdom tightened moderately in 2022, as the banking sector’s financing growth reached 14 per cent, exceeding deposit growth of 9 per cent.
“Rising interest rates led some customers to shift low-cost current account and savings account (Casa) deposits into term deposits,” Fitch said. “Sector's Casa deposits accounted for 56 per cent of total deposits at end-1Q23, down from 65 per cent at end-2020.”
Tighter liquidity in the system also pushed up the average cost of funding for Fitch-rated Saudi banks to 110 in 2022.
However, the Saudi authorities are expected to “continue deploying liquidity into the system, when needed, to support financing growth, as the supply of credit is key to the execution of Vision 2030”, Fitch said.
Visit Abu Dhabi culinary team's top Emirati restaurants in Abu Dhabi
Yadoo’s House Restaurant & Cafe
For the karak and Yoodo's house platter with includes eggs, balaleet, khamir and chebab bread.
Golden Dallah
For the cappuccino, luqaimat and aseeda.
Al Mrzab Restaurant
For the shrimp murabian and Kuwaiti options including Kuwaiti machboos with kebab and spicy sauce.
Al Derwaza
For the fish hubul, regag bread, biryani and special seafood soup.
The%20specs
%3Cp%3E%3Cstrong%3EPowertrain%3A%20%3C%2Fstrong%3ESingle%20electric%20motor%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E201hp%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E310Nm%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3ESingle-speed%20auto%0D%3Cbr%3E%3Cstrong%3EBattery%3A%20%3C%2Fstrong%3E53kWh%20lithium-ion%20battery%20pack%20(GS%20base%20model)%3B%2070kWh%20battery%20pack%20(GF)%0D%3Cbr%3E%3Cstrong%3ETouring%20range%3A%20%3C%2Fstrong%3E350km%20(GS)%3B%20480km%20(GF)%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh129%2C900%20(GS)%3B%20Dh149%2C000%20(GF)%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%3C%2Fstrong%3E%20Now%3C%2Fp%3E%0A
The stats
Ship name: MSC Bellissima
Ship class: Meraviglia Class
Delivery date: February 27, 2019
Gross tonnage: 171,598 GT
Passenger capacity: 5,686
Crew members: 1,536
Number of cabins: 2,217
Length: 315.3 metres
Maximum speed: 22.7 knots (42kph)
PROFILE OF HALAN
Started: November 2017
Founders: Mounir Nakhla, Ahmed Mohsen and Mohamed Aboulnaga
Based: Cairo, Egypt
Sector: transport and logistics
Size: 150 employees
Investment: approximately $8 million
Investors include: Singapore’s Battery Road Digital Holdings, Egypt’s Algebra Ventures, Uber co-founder and former CTO Oscar Salazar
More from Rashmee Roshan Lall
MATCH INFO
Arsenal 1 (Aubameyang 12’) Liverpool 1 (Minamino 73’)
Arsenal win 5-4 on penalties
Man of the Match: Ainsley Maitland-Niles (Arsenal)
Evacuations to France hit by controversy
- Over 500 Gazans have been evacuated to France since November 2023
- Evacuations were paused after a student already in France posted anti-Semitic content and was subsequently expelled to Qatar
- The Foreign Ministry launched a review to determine how authorities failed to detect the posts before her entry
- Artists and researchers fall under a programme called Pause that began in 2017
- It has benefited more than 700 people from 44 countries, including Syria, Turkey, Iran, and Sudan
- Since the start of the Gaza war, it has also included 45 Gazan beneficiaries
- Unlike students, they are allowed to bring their families to France
SCORES IN BRIEF
Lahore Qalandars 186 for 4 in 19.4 overs
(Sohail 100,Phil Salt 37 not out, Bilal Irshad 30, Josh Poysden 2-26)
bt Yorkshire Vikings 184 for 5 in 20 overs
(Jonathan Tattersall 36, Harry Brook 37, Gary Ballance 33, Adam Lyth 32, Shaheen Afridi 2-36).
Zombieland: Double Tap
Director: Ruben Fleischer
Stars: Woody Harrelson, Jesse Eisenberg, Emma Stone
Four out of five stars
Dates for the diary
To mark Bodytree’s 10th anniversary, the coming season will be filled with celebratory activities:
- September 21 Anyone interested in becoming a certified yoga instructor can sign up for a 250-hour course in Yoga Teacher Training with Jacquelene Sadek. It begins on September 21 and will take place over the course of six weekends.
- October 18 to 21 International yoga instructor, Yogi Nora, will be visiting Bodytree and offering classes.
- October 26 to November 4 International pilates instructor Courtney Miller will be on hand at the studio, offering classes.
- November 9 Bodytree is hosting a party to celebrate turning 10, and everyone is invited. Expect a day full of free classes on the grounds of the studio.
- December 11 Yogeswari, an advanced certified Jivamukti teacher, will be visiting the studio.
- February 2, 2018 Bodytree will host its 4th annual yoga market.
Day 5, Dubai Test: At a glance
Moment of the day Given the problems Sri Lanka have had in recent times, it was apt the winning catch was taken by Dinesh Chandimal. He is one of seven different captains Sri Lanka have had in just the past two years. He leads in understated fashion, but by example. His century in the first innings of this series set the shock win in motion.
Stat of the day This was the ninth Test Pakistan have lost in their past 11 matches, a run that started when they lost the final match of their three-Test series against West Indies in Sharjah last year. They have not drawn a match in almost two years and 19 matches, since they were held by England at the Zayed Cricket Stadium in Abu Dhabi in 2015.
The verdict Mickey Arthur basically acknowledged he had erred by basing Pakistan’s gameplan around three seam bowlers and asking for pitches with plenty of grass in Abu Dhabi and Sharjah. Why would Pakistan want to change the method that has treated them so well on these grounds in the past 10 years? It is unlikely Misbah-ul-Haq would have made the same mistake.
T10 Cricket League
Sharjah Cricket Stadium
December 14- 17
6pm, Opening ceremony, followed by:
Bengal Tigers v Kerala Kings
Maratha Arabians v Pakhtoons
Tickets available online at q-tickets.com/t10
MATCH INFO
Maratha Arabians 107-8 (10 ovs)
Lyth 21, Lynn 20, McClenaghan 20 no
Qalandars 60-4 (10 ovs)
Malan 32 no, McClenaghan 2-9
Maratha Arabians win by 47 runs
