By Courtney Trenwith
Official figures show Saudi consumers borrowed $86bn in Q2, up 22%
Saudi consumers are borrowing almost $1bn a day from local banks, according to the Saudi Arabian Monetary Agency.
About $86bn (SR321bn) was taken out in consumer loans between April-June this year – the equivalent of $945m a day.
This represents a 22 percent increase compared to the same period last year and SR14bn more than the first quarter, an indication that confidence in the economy is improving, the SAMA report says.
Loans to purchase vehicles and equipment accounted for the largest value, SR61.8bn, while SR41.47bn was borrowed to purchase real estate.
However, loans to pay off credit cards dropped 2 percent to SR7.7bn.
Customer deposits at Saudi banks also rose in the second quarter to SR1.32tn compared to SR1.16tn a year earlier.
Banking experts have warned the rapid growth in consumer loans, which account for about 80 percent of Saudi banks’ retail loan portfolios, could negatively affect the national economy.
In July, they said financial institutions were setting up illegal offices in regional areas of the kingdom, offering loans at high interest rates and buying debts, exploiting SAMA’s weak control over the industry and consumers desperate need for money, Arab News reported.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
There is a discrepancy between the Arabic and he English whereas the first talks about credit card loans the English version speaks of the loans to pay off credit cards so which one is it ?
"About $86bn (SR321bn) was taken out in consumer loans between April-June this year â€“ the equivalent of $945m a day." This is incorrect as the SAR 321 bn is the total amount in 1H FY2013. 2Q was an increase of SAR 13.7 bn, which translates to about SAR 150 million per day. Please check the numbers.