Saudi Arabia’s banking sector is forecast to grow at an annual rate of about 18 percent over the next four years, research house RNCOS has said.
It said the sector was “highly capitalised, well regulated and more profitable” despite the slowdown in the kingdom’s economy in 2009.
“As per our estimations, the banking assets are forecasted to grow at a compound annual growth rate (CAGR) of around 18 percent during 2010-2013,” RNCOS said in its latest analysis of the banking sector.
The study said Saudi Arabia’s banks had weathered “the global financial crisis well”, with bank loans growing at an annual rate of more than 17 percent from 2004-2009.
DUring the same period, deposits posted a growth rate of more than 16 percent, RNCOS added.
Its report said the Saudi Arabian banking sector had also witnessed a “notable expansion in the modern banking technologies” including internet and phone banking.
Earlier this month, Nomura forecast 2011 to be a strong recovery year for Saudi banks, backed by a rise in interest rates and higher lending activity.
The brokerage said it expected the banks to see an increase in their net interest margins next year, along with loan growth, supported by their high liquidity positions and an improvement in demand.
For 2010, however, the brokerage said it did not see Saudi banks posting a significant boost to their profitability, with banks continuing to book high provisions for bad loans.
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