Saudi bank loans reach highest growth rate in 19 months, surpassing $761bn

Saudi bank loans reach highest growth rate in 19 months, surpassing $761bn
Corporate lending saw an annual growth of 15.75 percent. Shutterstock
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Updated 08 November 2024
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Saudi bank loans reach highest growth rate in 19 months, surpassing $761bn

Saudi bank loans reach highest growth rate in 19 months, surpassing $761bn

RIYADH: Saudi bank loans reached SR2.85 trillion ($760.84 billion) in September, representing an annual growth rate of 12.16 percent — the highest in 19 months, according to recent data.

Figures from the Saudi Central Bank, also known as SAMA, showed that corporate lending dominated the sector, making up around 53.5 percent, with individual loans comprising the remaining figure.

The former category grew by 15.75 percent, outpacing the 8.3 percent annual growth in personal loans, underscoring the increasing demand for business financing across key sectors.

Real estate activities led corporate lending, accounting for 20.37 percent of all business loans and growing by 28.63 percent to reach SR310.83 billion.

The wholesale and retail trade sector followed, constituting 13.07 percent of these loans, with SR199.45 billion in financing. Lending to manufacturing came third, making up 11.78 percent, totaling SR179.83 billion.

Loans to the electricity, gas, and water supply sectors accounted for 11.25 percent of total lending, amounting to SR171.62 billion. This category experienced a growth rate of 29.35 percent.

While professional, scientific, and technical activities represented a small portion of total corporate loans at just 0.63 percent, they posted the highest annual growth rate of 79.6 percent, amounting to SR9.69 billion.

In September, Saudi banks’ loans-to-deposits ratio slightly declined to 79.66 percent, down from 79.71 percent in the same month of 2023, as per data from the SAMA.

The calculation includes loans minus provisions and commissions, providing a clearer view of actual lending capacity.

SAMA has set a regulatory limit of 90 percent for loans-to-deposits ratios, balancing banks’ lending capacity with liquidity stability while supporting economic growth through corporate and individual borrowing.

Compared to other GCC nations, such as the UAE where loans-to-deposits ratios can exceed 100 percent, SAMA’s cap reflects a more cautious approach, prioritizing liquidity stability in the banking sector.

Corporate real estate lending in Saudi Arabia has surged as banks align with Vision 2030’s targets for urban expansion, economic diversification, and investment attraction. 

This focus on real estate as the largest component of corporate lending is supported by robust demand for infrastructure, from commercial and residential developments to giga-projects like NEOM and the Red Sea.

Riyadh is a key beneficiary, attracting regional and international companies, which has increased the need for high-quality office spaces. 

The office market in the Saudi capital has seen a boost from the Regional Headquarters Program, drawing numerous global companies seeking a central base in the Middle East.

The government’s recent regulatory advancements are also pivotal in driving this lending trend. With improved transparency and a structured land registry, investors and developers now have greater confidence in the market.

The General Authority for Statistics recently reported a 2.6 percent annual rise in the real estate price index in the third quarter of this year, highlighting demand for residential and commercial spaces.

Major cities like Jeddah and Riyadh have seen considerable price increases in both land and building categories, driven by strong demand across residential, office, and mixed-use spaces.

The Real Estate General Authority anticipates that Saudi Arabia’s property market, one of the Middle East’s fastest-growing sectors, will reach a market volume of $69.51 billion in 2024 and $101.62 billion by 2029, with a projected compound annual growth rate of 8 percent.

Catalyzing growth in sectors under Vision 2030

Saudi Arabia’s scientific, professional, and technical services sector is driven by a rapid expansion of research, development, and innovation.

The launch of the Saudi Minds Platform by the Research, Development, and Innovation Authority in October is playing a key role in this shift.

This platform creates an advanced digital environment to support the RDI ecosystem, providing resources to researchers, innovators, and institutions.

By promoting knowledge exchange, international collaboration, and access to funding, the platform fosters a thriving scientific landscape, which, in turn, stimulates demand for financial services, driving lending growth in this sector.

As Saudi Arabia intensifies its efforts toward Vision 2030, investments in innovation and technology are expected to continue to fuel further growth in the RDI-driven economic landscape.


Saudi Arabia targets 30% land protection by 2030 in sustainability push

Saudi Arabia targets 30% land protection by 2030 in sustainability push
Updated 9 sec ago
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Saudi Arabia targets 30% land protection by 2030 in sustainability push

Saudi Arabia targets 30% land protection by 2030 in sustainability push

RIYADH: Saudi Arabia now has 20 percent of its territory designated as protected areas, a significant rise from just 3 percent a decade ago, according to a senior official. 

By 2030, this figure is projected to increase to 30 percent, said the Minister of State for Foreign Affairs and the Kingdom’s envoy for climate, Adel Al-Jubeir. 

During the “Climate Envoy Perspective” panel at the 4th Saudi Green Initiative Forum, Al-Jubeir highlighted Saudi Arabia’s dedication to environmental preservation and sustainability.   

“We are protecting 30 percent of our territory; it will be protected areas, both sea and land,” Al-Jubeir said, emphasizing the country’s efforts to conserve biodiversity and ensure sustainable resource management.  

He added: “The fact is, we used to (have) 3 percent of our territory protected 10 years ago, now we’re almost at 20 percent, and by 2030 will be 30 percent.”   

Saudi Arabia’s commitment to protecting its environment is evident in a wide range of initiatives. “We’re working on sustainable fishing in the Red Sea, as well as in the Gulf, and we’re making sure that everything we do is very, very in line with protecting our environment,” Al-Jubeir said.  

He also emphasized that tourism projects along the Red Sea are being developed with rigorous sustainability and environmental standards, ensuring minimal impact on marine life.   

“We have launched more than 80 initiatives in Saudi Arabia, from turning waste into energy, from redesigning our cities, from planting trees, from capturing carbon, both naturally as well as using technology, and we are transitioning towards renewable energy,” Al-Jubeir added.  

He highlighted the Kingdom’s ambitious energy goals, saying: “50 percent of our electricity by 2030 will come from renewable energy, the other 50 percent from natural gas.”   

The Kingdom’s efforts extend beyond its borders, with the nation supporting global initiatives to combat environmental challenges. “We’re helping countries adopt a circular carbon economy approach so that they can deal with planting and environmental issues more effectively,” Al-Jubeir explained.   

Addressing land degradation, the minister emphasized its global impact. “We believe that the issue of land degradation is not just an environmental issue; it’s a national security issue, it’s a global issue, because land degradation means less ability to produce food, which means people go from no-food areas to areas where they can grow food,” he said.   

Al-Jubeir also underscored the economic benefits of sustainability. “When you invest in solar energy and wind, it’s not only sustainable and good for the environment, it’s also very good for the pocketbook,” he said. “Investors are more confident when they come to a country where they have clean water, clean air, and so this is part of what we’re doing.” 

The minister highlighted the broader importance of environmental preservation, stating: “People are more productive when the environment in which they live is pleasant. We breathe the same air as everybody else. We need the same water like everybody else, and so we are very, very sensitive to our environment and to ensuring that we protect it and that we restore it if it needs to be restored.”   

Saudi Arabia, known as the world’s most efficient producer of oil and gas, is also emerging as a global leader in renewable energy. “We are an example for the world in terms of energy, in terms of renewable energy, in terms of our commitment to the environment,” Al-Jubeir said.   

He stressed the Kingdom’s focus on collaboration and practical solutions to address climate challenges.  

“We believe that we have the technology, we believe that we have the financial resources. We believe that by working together, we can overcome many of the challenges that we face, but we cannot do this if we’re trying to assign blame or trying to point fingers,” Al-Jubeir added. 


COP16: Over $12bn pledged for drought resilience and land restoration on 2nd day

COP16: Over $12bn pledged for drought resilience and land restoration on 2nd day
Updated 56 min 7 sec ago
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COP16: Over $12bn pledged for drought resilience and land restoration on 2nd day

COP16: Over $12bn pledged for drought resilience and land restoration on 2nd day

RIYADH: More than $12 billion has been pledged for drought resilience, land restoration, and combating land degradation at the 16th Conference of the Parties to the UN Convention to Combat Desertification. 

The Arab Coordination Group contributed an additional $10 billion to address desertification, land degradation, and drought, according to a press release.  

This follows the launch of the Riyadh Global Drought Resilience Partnership, with $1 billion each from the OPEC Fund and Islamic Development Bank, and $150 million from Saudi Arabia.  

The pledges were made during the Ministerial Dialogue on Finance, a key segment of COP16 focused on unlocking public and private sector funding. 

“With over $12 billion pledged for major land restoration and drought resilience initiatives in just the first two days, COP16 in Riyadh is already proving a landmark moment in the fight against drought,” said Osama Faqeeha, deputy minister for Environment, Ministry of Environment, Water and Agriculture, and advisor to the UNCCD COP16 Presidency.  

“I hope this is just the beginning, and over the coming days and weeks, we see further contributions from international private and public sector partners, that further amplify the impact of vital drought resilience and land restoration initiatives,” Faqeeha added. 

He also called for the redirection of Official Development Assistance funds to address land degradation and drought. “As shown by the UNCCD’s latest report, there is a dire need for additional international funding,” Faqeeha added. 

Speaking on behalf of the Arab Coordination Group, Muhammad Al-Jasser, chairman of the Islamic Development Bank Group, said: “Recognizing the critical role of finance in advancing these efforts, we commit to allocate up to $10 billion in financing approvals by 2030. These funds will target global land restoration, desertification prevention, and nature positive development projects aligned with the objectives of the Riyadh Global Drought Resilience Partnership.” 

The UNCCD’s latest financial needs assessment report revealed that $355 billion annually is required from 2025 to 2030 to meet land restoration targets, but only $77 billion in investments are projected.  

On the second day of COP16 in Riyadh, the UNCCD released its financial needs assessment report, which also highlighted the private sector’s limited involvement. It contributes just 6 percent of global funding, despite the potential to generate up to $1.8 trillion annually from restoring over one billion hectares of land. 

As COP16 progresses, there is growing pressure for international stakeholders to close the financing gap and accelerate efforts to combat land degradation and boost drought resilience. 


Aramco, Linde, and SLB partner on major carbon capture hub in Jubail 

Aramco, Linde, and SLB partner on major carbon capture hub in Jubail 
Updated 04 December 2024
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Aramco, Linde, and SLB partner on major carbon capture hub in Jubail 

Aramco, Linde, and SLB partner on major carbon capture hub in Jubail 
  • Under the agreement, Aramco will hold a 60 percent equity stake, with Linde and SLB each owning 20 percent
  • The initiative supports Aramco’s broader ambition to achieve net-zero Scope 1 and Scope 2 greenhouse gas emissions across its wholly-owned operated assets by 2050

RIYADH: Saudi energy giant Aramco has signed a shareholders’ agreement with Linde and SLB to advance the development of a major carbon capture and storage hub in Jubail,  

Under the agreement, Aramco will hold a 60 percent equity stake, with Linde and SLB each owning 20 percent, according to a press release. 

Located in Saudi Arabia’s Eastern Province, the project is set to be among the largest of its kind globally. It marks a critical step toward Aramco’s emission mitigation goals and aligns with its 2035 interim climate objectives. 

Phase one of the hub aims to capture and store up to 9 million tonnes of CO2 annually, with construction expected to be completed by the end of 2027. Future phases will further expand its capacity. 

“CCS plays a critical role in furthering our sustainability ambitions and our new energies business. This announcement represents a step forward in delivering on our strategy to contribute to global carbon management solutions and achieve our emission mitigation goals,” said Ashraf Al-Ghazzawi, executive vice president of strategy & corporate development at Aramco. 

He added: “Aramco’s collaboration with SLB and Linde demonstrates the importance of global partnerships in driving technological innovation, reducing emissions from conventional energy sources and enabling new, lower-carbon energy solutions.” 

Executives from Aramco, Linde, and SLB at the signing ceremony. Supplied

The executive noted that the CCS hub was among several programs that would enable them to meet the rising demand for affordable, reliable, and more sustainable energy. 

The initiative supports Aramco’s broader ambition to achieve net-zero Scope 1 and Scope 2 greenhouse gas emissions across its wholly-owned operated assets by 2050, as well as its interim target to reduce upstream carbon intensity by 15 percent by 2035. 

Oliver Pfann, Linde’s executive vice president for Europe, the Middle East and Africa, noted the project’s significance to Saudi Arabia’s climate goals. “Carbon capture and sequestration is essential for achieving the Kingdom’s emission reduction targets. Linde is proud to collaborate with Aramco and SLB, contributing Linde’s innovative technology and experience in delivering world-scale decarbonization projects,” he said. 

Announced during the Saudi Green Initiative Forum in Riyadh, the project reflects Saudi Arabia’s commitment to achieving its 2060 net-zero target.  

Phase one will capture CO2 from three Aramco gas plants and other industrial sources. The CO2 will be transported through a pipeline network and stored in a saline aquifer, leveraging the region’s geological capacity for carbon storage. 

Gavin Rennick, SLB’s president of new energy, highlighted the hub’s potential to reduce emissions. “Leveraging our proven portfolio of CCS technologies and extensive experience in complex CCS projects around the world, we are confident that SLB will play a critical role in advancing this important initiative. This project aligns perfectly with our commitment to industrial decarbonization, and we look forward to collaborating closely with Aramco and Linde to make it a success.” 

The hub also complements Aramco’s blue hydrogen and ammonia initiatives, reinforcing its efforts to support a circular carbon economy and contribute to the Kingdom’s energy transition.


Oil Updates — prices inch up on geopolitical tensions, OPEC+ supply plans

Oil Updates — prices inch up on geopolitical tensions, OPEC+ supply plans
Updated 04 December 2024
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Oil Updates — prices inch up on geopolitical tensions, OPEC+ supply plans

Oil Updates — prices inch up on geopolitical tensions, OPEC+ supply plans
  • Brent crude futures rose 23 cents, or 0.3%, to $73.85 a barrel
  • Analysts expect a 700,000 barrel decline in crude and a 639,000-barrel increase in gasoline

SINGAPORE: Oil prices firmed on Wednesday as market participants weighed up geopolitical tensions and the prospect of OPEC+ extending supply cuts against weaker demand, according to Reuters.
Brent crude futures rose 23 cents, or 0.3 percent, to $73.85 a barrel by 10:00 a.m. Saudi time, while US West Texas Intermediate crude futures gained 19 cents, or 0.3 percent, to $70.13.
On Tuesday, Brent posted its biggest gain in two weeks, rising 2.5 percent.
A shaky ceasefire between Israel and Hezbollah, South Korea’s curtailed declaration of martial law and a rebel offensive in Syria that threatens to draw in forces from several oil-producing countries, all lent support to oil prices, said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Oil markets, however, are largely discounting an abundantly supplied 2025 amid sluggish demand signals from the US and China, the world’s top two economies, she added.
“Weaker demand signals from mainland China are raising concerns about demand in the oil market ... The world’s largest crude oil importer may struggle to maintain its significant share of global demand by 2025.”
Meanwhile, crude oil inventories in the US rose 1.2 million barrels last week, market sources said, citing data from the American Petroleum Institute.
Gasoline inventory also rose, by 4.6 million barrels, even though the week included Thanksgiving when demand typically rises as families travel by car for holiday get-togethers.
Official data on oil stocks from the US Energy Information Administration is due on Wednesday at 6:30 p.m. Saudi time. Analysts polled by Reuters expect a 700,000 barrel decline in crude and a 639,000-barrel increase in gasoline.
Also supporting prices, the Organization of the Petroleum Exporting Countries and allies, or OPEC+, will likely extend output cuts until the end of the first quarter of next year when members meet on Thursday, industry sources told Reuters. OPEC+ has been looking to gradually phase out supply cuts through next year.
“The main issue facing any return of OPEC+ supply is that non-OPEC supply growth in 2025 is expected to eclipse the growth in global oil demand,” said Commonwealth Bank of Australia analyst Vivek Dhar in a note.
“The International Energy Agency expects non-OPEC supply growth, led by the US, Canada, Guyana and Brazil, to increase supply by 1.5 million barrels per day next year. Global oil demand is only expected to lift about 1 million bpd as China’s oil demand is expected to remain subdued.”
In the Middle East, Israel said on Tuesday it would return to war with Hezbollah if their truce collapses, and its attacks would go deeper into Lebanon and target the state itself. The comment followed the deadliest day since Israel and Hezbollah agreed to a ceasefire last week.
In neighboring Syria, rebels advancing against government forces pushed close on Tuesday to the major city of Hama, rebels and a war monitor said, after their surprise capture of Aleppo last week.


Saudi Crown Prince unveils National Red Sea Sustainability Strategy to drive blue economy 

Saudi Crown Prince unveils National Red Sea Sustainability Strategy to drive blue economy 
Updated 04 December 2024
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Saudi Crown Prince unveils National Red Sea Sustainability Strategy to drive blue economy 

Saudi Crown Prince unveils National Red Sea Sustainability Strategy to drive blue economy 
  • Covering 186,000 sq. km and featuring 1,800 km of coastline, the area is home to diverse marine ecosystems, including the world’s fourth-largest barrier reef system and 6.2 percent of global coral reefs
  • The initiative reflects Saudi Arabia’s broader efforts to integrate environmental sustainability into its economic agenda while developing its marine-based industries

RIYADH: Saudi Crown Prince Mohammed bin Salman has launched the National Red Sea Sustainability Strategy, an initiative aimed at safeguarding the marine environment, supporting local communities, and advancing the Kingdom’s transition to a blue economy.  

The strategy is part of Saudi Vision 2030 and ties into national priorities for research, development, and innovation, particularly in environmental sustainability, the Saudi Press Agency reported. 

“The Kingdom of Saudi Arabia continues to unleash its enormous economic, geographical and cultural potential, and its pioneering efforts in sustainability and environmental conservation,” said the Crown Prince, who also serves as prime minister and chairman of the Council of Economic and Development Affairs.  

He added: “Through this strategy, the Kingdom positions the blue economy as a fundamental pillar of its diversified economy and aspires for the Red Sea region to become a global reference for leading blue economy activities, and for the Kingdom to become a global leader in the field of research, development and innovation in blue economy.”  

Covering 186,000 sq. km and featuring 1,800 km of coastline, the area is home to diverse marine ecosystems, including the world’s fourth-largest barrier reef system and 6.2 percent of global coral reefs.  

The strategy outlines measures to protect these resources while developing industries such as ecotourism, fisheries, renewable energy, and water desalination. 

By 2030, the plan seeks to expand marine and coastal protected areas from 3 percent to 30 percent, increase the share of renewable energy in the energy mix to 50 percent, and create new jobs in the blue economy. It also aims to protect investments in coastal tourism, which are expected to contribute to the national economy. 

The strategy focuses on five main objectives: environmental sustainability, economic development, social development, safety and security, and governance. It includes 48 initiatives designed to balance economic activity with environmental preservation and address climate challenges, the SPA added. 

The Crown Prince emphasized the Kingdom’s commitment to a sustainable future for the Red Sea, adding, “We look forward to everyone’s cooperation in protecting our Red Sea coast and the nature and communities that depend on it.” 

The initiative reflects Saudi Arabia’s broader efforts to integrate environmental sustainability into its economic agenda while developing its marine-based industries.