Lending income underpins record Q1 for Saudi banks

• Increased borrowing
• Profits grew 19% YoY
• Banks’ shares rose 5%

Three of Saudi Arabia’s five biggest banks by assets have reported record first-quarter profits after generating more income from loans and on lower operating costs.

Saudi National Bank, the kingdom’s largest lender, reported a 19 percent jump in profit in the three months to March 31 to SAR6 billion ($1.6 billion), compared with the same period last year. Assets rose 9 percent to SAR1.17 trillion in the 12 months to March 31.

Riyad Bank, Saudi Arabia’s number three lender, reported a 20 percent increase in first quarter net income to SAR2.5 billion, on higher operating income and lower expenses. Assets rose 15 percent to SAR465 billion in the year to March 31, the bank said.

Banque Saudi Fransi, Saudi Arabia’s fifth-largest bank, also reported a 20 percent increase in Q1 net income, to SAR1.3 billion. Assets increased 13 percent to SAR303 billion in the 12 months to March 31, the bank said.

Commercial banks in Saudi Arabia, the largest Arab economy, saw a record year in 2024, with aggregate profits increasing 15 percent to almost SAR90 billion ($24 billion). 

• Saudi banks have room to expand lending
• Saudi commercial banks hit record profits in 2024
• Saudi Arabia’s biggest bank wants wealthy depositors back

Borrowing in Saudi Arabia has grown, driven in part by billion-dollar government-backed economic diversification projects and a construction sector that could become the largest in the world by 2028, according to JLL real estate services company.

Bank lending is expected to grow further this year.

SNB’s share price jumped almost 4 percent following its earnings statement on Tuesday; Saudi Fransi’s more than 2 percent and Riyad Bank almost 3 percent.

Shares of banks listed on the Saudi Exchange have risen 5 percent in the year to now, outperforming the Tadawul All Share Index. By contrast, the index has fallen almost 8 percent over the same period.

The Saudi Public Investment Fund (PIF) owns 37 percent of SNB and almost 22 percent of Riyad Bank. The government’s General Organization for Social Insurance also owns 10 percent of Riyad Bank.