In Saudi Arabia’s banking sector, success stories have become the common currency. Today, confidence and optimism permeate the country’s financial sector and with good reason. Return on assets for Saudi banks in 2014 was 1.89%, while the system’s Tier 1 capital ratio was 16.03%. Much of this strength is attributable to the Saudi Arabian Monetary Agency (SAMA), the central bank, which has prudently managed the country’s banking sector through a commitment to long-term, sustainable growth.
As the country’s lenders gear up for a renewed period of development in 2015, the governor of SAMA, Dr Fahad Al-Mubarak, believes the booming consumer sector will play an important role in the coming years. “In Saudi Arabia, the scale of consumer loans has expanded steadily over the years. Consumer loans showed an annual average growth of about 16% between 2009 and 2013. They rose to $90.8bn in 2013 and constituted 30.3% of total bank claims on the private sector and 12.1% of GDP [gross domestic product],” he says.