Vision 2030 projects drive Saudi loan growth

Saudi Arabia’s two largest banks boast similar performances in gross total loan growth over the past five years.

Both National Commercial Bank (now known as Saudi National Bank following the merger with Samba Financial Group in April) and Al Rajhi Bank saw gross total loans increase by about 37% between 2016 and 2020, according to The Banker Database.

Last year, National Commercial Bank, the country’s largest lender by assets and Tier 1 capital, saw gross total loans increase 23% year-on-year to $96.6bn, from $78.8bn in 2019.

Meanwhile, Al Rajhi Bank, the country’s second largest lender by assets and Tier 1 capital, also saw gross total loans increase by almost the same percentage, to $93.8bn in 2020 from $77bn in 2019.

Lending has surged in the Gulf country as the Saudi government seeks to develop its Vision 2030 programme, which was announced in 2016, and seeks to reduce Saudi Arabia’s dependence on oil and diversify its economy, by investing in a raft of areas including infrastructure and tourism. The retail mortgage market has also been booming. 

The neck-and-neck performance in gross total loan growth by Saudi Arabia's two biggest banks looks set to shift after the merger between National Commercial Bank and rival Samba.

Samba saw gross total loans increase 9.7% year-on-year to $43.1bn in 2020, from $39.3bn in 2019.

The merged entity — rebranded as Saudi National Bank — is expected to challenge Qatar's QNB Group for the title of the biggest bank in the Middle East.

Trends identified using The Banker Database, an online database providing comprehensive financial data and insight for 4000 of the world's leading banks in 190 countries. Contact us.