By Innovation-sa on May 27, 2018 in News
The Saudi domestic banks, which are working to capitalize on economic reforms, have cumulatively reported a 7.5 percent year-on-year growth and an 18 percent quarter-on-quarter increase in net profit for the first quarter of 2018, despite slight recessionary trends, said a report published by Moody’s Investors Service on Wednesday.
According to Moody’s, interest expenses in Saudi banks declined by 12.5 percent year-on-year and 2 percent quarter-on-quarter, suggesting a significant improvement in funding conditions in Saudi Arabia after the substantial tightening in 2016.
Moreover, Saudi Arabia’s improving liquidity and funding conditions since 2017 have narrowed the Saudi Arabian Interbank Offered Rate’s (SAIBOR) spread against the US dollar-denominated London Interbank Offered Rate, even reaching negative spreads in March 2018, despite several rate hikes by the US Federal Reserve, said the report.
The report also observed that Saudi banks have an average net-loans-to-deposits ratio of 83 percent and above 60 percent of their liabilities were in non-interest-bearing deposits as of March 2018.
The Kingdom’s recent economic reforms focussing on investments in non-oil related sectors and its privatization plan has opened several business opportunities and banks across the world like Deutsche Bank AG and Citigroup Inc. are establishing their presence in the Kingdom.
Source:
http://www.arabnews.com/node/1308536