Saudi Arabian banks keep growing

At the end of last year, Saudi National Bank (SNB), Saudi Arabia’s largest bank, acquired a 9.9% stake in Credit Suisse and became its largest shareholder.

The lender will likely benefit from Credit Suisse’s experience in private wealth management and have an opportunity to catch up with its European and North American competitors.

The move is just another sign of the strength of Saudi Arabia’s banking industry. The top 10 banks in the country witnessed robust growth in profitability, as net profit increased by 9.3% quarter on quarter and return on equity by 14.8% in the third quarter of 2022, according to a report by Alvarez and Marsal. 

Pre-tax profits at the country’s biggest lenders were already on an upward trend before the Covid-19 pandemic. They resumed the trend in 2021. SNB increased pre-tax profits from $3.45bn in 2020 to $3.85bn the following year. Over the same period, Al Rajhi Bank jumped from $3.15bn to $4.39bn, and Riyad Bank from $1.46bn to $1.79bn. Saudi British Bank returned to profit at the end of 2021. 

Banks in Saudi Arabia have been driving growth across the Arab region, with its lenders’ combined Tier 1 capital base higher than any other country in The Banker's Top 100 Arab Banks 2022. Higher oil prices supported economic growth while the country’s booming mortgage market was fuelled by government initiatives to help Saudi nationals acquire property, as The Banker reported previously.