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STC digital banking given go-ahead to open in Saudi Arabia

By Edmund Bower
Modern arab housewife typing card number on laptop, banking online, purchase Alamy via Reuters
STC Bank is to commence operations, boosting Saudi Arabia's digital banking landscape. It will provide a comprehensive suite of financial products for customers across the kingdom
  • Digital banking services
  • Fast growing Saudi market
  • Digital transformation milestone

STC Bank, a digital lender launched by Saudi Arabia’s biggest telecoms company, will commence operations in Saudi Arabia after receiving authorisation from the Saudi Central Bank (Sama).

In an announcement published on the Saudi Exchange on Wednesday morning, STC Group (Saudi Telecoms Company) said that STC Bank’s launch “represents a significant milestone in the kingdom’s digital transformation journey and towards the adoption of digital banking services within the financial sector.”

STC said the bank “will provide a variety of financial products and solutions that will contribute to elevating the banking services.”

The telco company, which is 64 percent owned by the Public Investment Fund (PIF) – Saudi Arabia’s $930 billion sovereign wealth fund – saw its share price rise slightly to reach a three-month high following the announcement.

Digital banking is a fast growing market in Saudi Arabia and has been encouraged by a government with an interest in the digitisation of services across the kingdom. STC Bank is one of three with a digital banking license in the kingdom and the third to receive Sama authorisation in just over a month. 

D360 Bank, which names PIF and Derayah Global as strategic investors, was given the go-ahead on December 17.

Vision Bank, which is owned solely by Abu Dhabi-based Gulf Islamic Investments (GII), announced the launch of its pilot phase on January 2.

GII is based in Abu Dhabi Global Market (ADGM) so its Islamic banking licence is ADGM’s Financial Services Regulatory Authority.

The Saudi cabinet first approved a banking license for STC in June 2021. The company’s digital wallet, STC Pay, was launched in 2018 largely to serve expatriates in the kingdom and facilitate international money transfers. 

It grew to become one of the biggest mobile fintech services in the Gulf, with 27 million mobile subscribers to STC KSA as of Q3 2024 and a further 4 million for STC Bahrain and STC Kuwait.

STC Group recorded its highest ever revenue in the first nine months of 2024, with gross profit also increasing by almost 18 percent compared to the previous year to reach SAR 28 billion ($7.5 billion).

Also on Wednesday, Al Rajhi Bank, the Saudi National Bank (SNB), and the Saudi Investment Bank (SAIB), announced increased profits in their financial reports from 2024.

Al Rajhi’s net profit increased 18 percent from last year to reach SAR 19.7 billion ($5.2 billion), SNB’s increased 5.9 percent to SAR 21.2 billion ($5.6 billion), and SAIB’s increased 11 percent to SAR 1.9 billion ($522 million).

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