Central Bank Governor Ahmed Al-Kholifey said that deflation is unlikely in Saudi Arabia due to consumer demand and real estate loans
Saudi Arabia is unlikely to see more bank mergers beyond the two already announced, Central Bank Governor Ahmed Al-Kholifey said on Sunday.
In December, National Commercial Bank – the kingdom’s largest lender by assets – and Riyad Bank announced they were in the early stages of preliminary talks to potentially create a combined group with $183 million in assets.
Earlier in 2018, Alawwal Bank and Saudi British Bank (SABB) announced that they agreed a merger deal that will lead to the creation of Saudi Arabia's third largest lender.
In an interview with Arabian Business, Alawwal CEO Soren Nikolajsen said that the merger is “on track” for the merger to take place in the first half of 2019.
Kholifey also said that he does not expect deflation in Saudi Arabia, largely due to consumer demand and real estate loans. He added that liquidity is strong.
“I don’t think there will be any deflation, all data reflects optimism,” he said. “We will soon publish real estate financing and you will see a big leap, and as you know real estate is one of the main drivers. As for the consumer sector, it is active,” he said.
Statistics unveiled last week showed that Saudi Arabia’s annual consumer price index fell 1.9 percent in January, with housing, water and energy prices all falling.