JEDDAH, 29 January 2006 — Saudi banks in November slowed down a bit after a period of heavy spending during Ramadan and Eid Al-Fitr. The banking climate in November was also affected by the decision of SAMA (Saudi Arabian Monetary Agency) to reduce the amount given as personal loans by commercial banks. However, assets of Saudi banks rose in November.
On the assets side of the ledger, the consolidated balance sheet of Saudi commercial banks showed an overall increase of 1.7 percent of total assets, increasing from SR735 billion ($196 billion) in October to SR748 billion ($199 billion) in November. Saudi banks’ total deposits with SAMA remained unchanged for October and November at SR23 billion ($6 billion). The balance sheet also showed a 36 percent decrease in bank liquidity as cash in vaults in November. The total cash in vaults for Saudi banks in November was SR7.3 billion ($1.94 billion) compared to SR11.5 billion ($3 billion) in October.
Saudi banks also witnessed an increase in total deposits from SR469 billion ($125 billion) in October to SR477 billion ($127 billion) in November. By the end of November, total checking accounts (demand deposits) surged to SR218 billion ($58 billion) showing an increase by 3.8 percent over October, with 94 percent of the total demand deposits coming from businesses and individuals. The amount in checking accounts belonging to businesses and individuals was SR206 billion ($54.9 billion), with Saudi official entities depositing the remaining SR12 billion ($3.2 billion).
Time deposits and saving deposits in Saudi Arabia still lag behind demand deposits. These deposits in Saudi banks in November amounted to SR162 billion ($43 billion) with SR99.4 billion ($26.5 billion) coming from individuals and businesses. The remainder came from government entities. The difference between the government entities’ demand deposits and saving deposits in November was about SR40 billion ($10.6 billion). This reflects the government’s preference for time and savings deposits. The high level of demand deposits, in comparison to time and saving deposits, reflects, among many other things, a high level of consumption in Saudi Arabia which requires cash on demand.
Foreign currency deposits in Saudi banks decreased slightly from SR79.3 billion ($21.14 billion) to SR79.1 billion ($21 billion).
Foreign currency deposits have been decreasing since September, the month when they reached the year’s record high of SR80.6 billion ($21.4 billion). This was the highest since 1999.
At the beginning of 2005, the total amount of foreign currency in Saudi banks was SR68.9 billion ($18.3 billion). Between January and November, the total amount of foreign currency in Saudi banks increased by 12 percent. The cumulative profits of Saudi banks in November were SR24.2 billion ($6.45 billion). Their profits in November were SR2.43 billion ($684 million). This is the highest since 1999 when the cumulative profit for the year was SR6.35 billion ($1.69 billion).
Saudi banks cumulative profits for 2005 increased from SR1.6 billion ($426 million) in January to SR24.2 billion in November. In addition, Saudi banks’ capital and reserves in November increased by only SR132 million ($35.2 million) over October to become SR64.5 billion ($17 billion).
