Most Saudi Arabian banks not only carried through their stellar performances of 2000 into 2001 but also managed, despite the upheavals of September 11 and its aftermath, to show significantly improved growth and profitability. While 2002 promises to be a much tougher year, with different economic and political variables at play, there is considerable growth potential in the rapidly expanding retail market and optimism that the forthcoming capital markets law will bring significant benefits.
"The banks are doing very well, both in terms of profit, capital ratios and liquidity as well as in the advancement of technology," Sheikh Hamad Al-Sayari, governor of the Saudi Arabian Monetary Agency (SAMA), told The Banker. The combined net income of the kingdom's 10 banks (as well as the recently established Gulf International Bank branch in Riyadh) rose a further 10.6% in 2001 to SR10.2bn ($2.72bn) following strong expansion the year before. The combined return on equity in 2001 reached a healthy 21.2% and a strong 2.2% return on assets.
