Saudi banks view future with a mixture of caution and optimism

The performance of the Saudi banking sector, despite the global financial crisis and recent political turmoil in the Middle East and north Africa (MENA), remains sound and profitable. The outlook for 2011 widely viewed is cautiously optimistic, buoyed by strong budget expansion and the government's recent $36bn additional spending stimulus.

Although lending has been slow, with aggregate total credit facilities growing only by 2.7% in 2010 to reach SR761bn ($203bn), according to the latest Saudi Arabian Monetary Agency (SAMA) figures, there are signs of improvement and that banks are becoming more willing to lend. As David Dew, managing director of Saudi British Bank, says: “I think the appetite to lend has resumed and borrowers are more willing to borrow.”