Saudi credit card loans up 69%

First-quarter loans on credit cards rose 68.7 % in Saudi Arabia from a year earlier while consumer loans fell, data from the central bank showed on Saturday.

Saudi Arabia was the Middle East's most profitable credit card market, according to a study by UK-based Lafferty Group, accounting for a third of bank earnings from their credit card businesses in Middle East last year.

Loans on credit cards rose to 7.9 billion riyals ($2.1 billion) in the three months to March 31 from 4.68 billion riyals a year earlier, according to data published by the Saudi Arabian Monetary Agency (SAMA), or central bank.

Consumer loans fell 1.9 % to 180.5 billion riyals in the same period.

In late 2005, SAMA slapped stringent measures on consumer lending, which had been growing rapidly as Saudis borrowed to buy stocks, a few months before a severe crash started to hit the Arab world's largest bourse.

Year-on-year growth in first-quarter loans on credit cards was 40.8 % in 2006 while it stood at 47.4 % for consumer loans.

Compared to the previous quarter, first-quarter loans on credit cards rose 7.5 % in 2007 against a near 10 % rise between the first quarter of 2006 and the fourth quarter of 2005.

Credit card issuers and networks Visa Inc., MasterCard Inc. and American Express all operate in Saudi Arabia.

Banks make $95 per year on each credit card issued in Saudi Arabia compared with $20 in Egypt, Lafferty said.

Saudi Arabia also accounted for more than half of the $61 billion in outstanding consumer loans in the Gulf Arab region at the end of 2006.

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