Armed with deep pools of liquidity, many Middle Eastern banks are exploring new avenues of growth, from expanding their regional presence to concentrating on innovation within the Islamic finance sphere.

With significant potential for growth in the country's real estate, retail and capital markets, Saudi Arabia's banks, which are already highly liquid and rapidly increasing their profitability, are making bold projections for their future successes.

Loans are up, deposits are growing and profits are healthy in Saudi Arabia's banks. But with growth opportunities in Islamic finance and a low proportion of home ownership in the country, there are still many more lucrative areas for these institutions to tap.

By identifying potential weaknesses and fixing them – diversifying a previously oil-reliant economy and encouraging growth in the private sector – Saudi Arabia has managed to sustain a growing economy, even through times of economic and political turmoil.

Muhammad Al-Jasser, the governor of Saudi Arabian Monetary Agency, says that while the country's role within the wider Middle Eastern and global economies is an important one, in times of such financial anxiety, it is important to focus on domestic matters.

It has taken nearly two years, but Indonesian mobile telecoms operator Axis has secured $1.2bn of sharia-compliant financing. For many of the players involved, it was their first dealing with sharia principles, presenting HSBC and its Saudi affiliate with a complex task.

Saudi Arabia stuttered during the global financial crisis, but never plumbed the depths of the world's more developed economies. Now, the country's leaders are eyeing a more prosperous future, with a key focus being on educating and employing its youth and women.

Mohammad Al-Jasser, governor of Saudi Arabia’s central bank, discusses the huge potential of sukuk issuance in an interview with Stephen Timewell in Riyadh.

Saudi Arabia's banks largely enjoyed a profitable 2010 and are looking to 2011 with renewed optimism. Though the lessons of the past few years mean that a cautious approach will be adhered to, the sector's future certainly looks bright.

With its seven-year maturity making it the longest for any sukuk drawn up by a Saudi corporate, the $1.9bn capital raising put together for the Saudi Electric Company marks a huge achievement for the HSBC Saudi Arabia team that assembled it. Writer Edward Russell-Walling