Saudi banks enjoyed a watershed year in 2022. While the country’s unprecedented mortgage boom is starting to ease, lenders benefited from an increase in public spending thanks to a surge in oil revenues, with megaprojects such as Neom and the Red Sea Project fuelling strong demand for corporate credit.
Of the 10 Saudi banks featured in this year’s Top 1000 World Bank ranking, as well as the performance tables, all but two have improved their positions in the main ranking.
Saudi National Bank (SNB) remains the largest lender in the country by Tier 1 capital and assets, rising three places to 64th in the overall Top 1000. Its ascent in the ranking comes even as growth across assets and Tier capital was muted during 2022, attributable in part to a 3% drop in deposits.
However, the bank – created via the merger of National Commercial Bank and Samba Financial Group in 2021 – saw pre-tax profits rise by an impressive 47.4%, higher than any other Saudi lender in this year’s ranking, as post-merger efficiency gains saw costs fall.
In spite of SNB’s strong showing in performance metrics such as profitability, operational efficiency and return on risk, Al Rajhi Bank is crowned the country’s best-performing bank in this year’s performance table. SNB remains in third position in terms of overall performance, weighed down by lower scores for growth and liquidity.
Al Rajhi, the country’s second-largest lender, tops the performance rankings thanks in no small part to its impressive 43.8% boost in Tier 1 capital in 2022, the highest non-acquisition-related increase of any lender in the world with assets in excess of $100bn.
This growth was fuelled by a 57% rise in corporate lending and a 30% rise in mortgages. Al Rajhi, which ranked in fourth position in 2022’s performance table, also posted high scores for metrics including asset quality and leverage, ranking highest in the Saudi Arabia in terms of return on assets and return on capital.
Riyad Bank, the third-largest lender in the country ranking, comes in second place in terms of overall performance, compared with seventh place in 2022. The bank recorded an 18.5% rise in Tier 1 capital for the year – second only to Al Rajhi in the country – which has allowed it to move up 18 places in the global ranking.
The lender’s performance score was boosted by a table-topping performance for soundness, thanks to a healthy rise in its capital to assets ratio during 2022, together with a strong score for leverage.
