Arab News, Sunday, Aug 14, 2022 | Muharram 16, 1444
Saudi banks increase loans by $77.1bn in Q2
Saudi Arabia: Saudi Arabia’s bank
loan portfolio rose by SR289 billion ($77.1 billion) in the second quarter of
this year from the same quarter a year ago, according to a recent statistical
bulletin released by the Saudi Central Bank, also known as SAMA.
Bank loans totaled SR2.42 trillion at the end of
the second quarter of 2022, up from SR1.95 trillion in the second quarter of
2021, showed the SAMA report.
The SR289 billion increase was led by an SR191.1
billion growth in miscellaneous activities. Its share increased by 2 percentage
points to 52 percent in the second quarter of 2022.
The data showed that the value of Saudi banks’
aggregate loan portfolio totaled SR2.24 trillion at the end of the second
quarter of 2022, up 14.8 percent from the year before and up 4 percent from the
previous quarter.
The annual growth in bank loans dropped to a
negative in 2017 and remained below zero until the third quarter of 2018.
However, bank loans have been seeing an upward trend ever since, according to
the SAMA report.
From the third quarter of 2018 until the end of
2019, the value of Saudi bank loans grew at an average rate of 3.7 percent year
on year; between 2020 and the second quarter of this year, it grew at an average
rate of 14.8 percent year on year.
The dominating segment in the Kingdom’s loans was
miscellaneous economic activity, which acquired 52 percent of the total loans
this quarter.
Commerce came in second, holding 17.2 percent of
total loans in the country, recording SR385.7 billion in the second quarter,
showed the data.
The Ministry of Commerce in the Kingdom has been
moving toward the Saudi Vision 2030 by developing the trade sector and ensuring
its sustainability, according to the Kingdom’s Unified National Platform.
The platform stated: “The Ministry of Commerce’s
mission focuses on improving the business environment in Saudi Arabia through
enacting, developing and supervising the implementation of flexible and fair
trade policies and regulations.”
Even though total bank loans expanded this
quarter, two economic activities saw a quarterly decline in bank credit in the
second quarter of this year: manufacturing and processing and transport and
communication.
Bank loans to transport and communication fell by
SR6.2 billion in the second quarter of 2022 from the same quarter the previous
year.
Compared to the previous quarter, the sector
dropped from 2.1 percent of total loans in the first quarter to 1.9 percent,
showed the SAMA bulletin.
Bank loans given to manufacturing and processing
fell by SR4 billion in the second quarter of 2022 from the same quarter the
previous year.
The data showed that the sector dropped from 7.2
percent of total loans in the first quarter to 6.9 percent compared to the
previous quarter.