One of the more interesting developments in Saudi Arabia’s financial sector in 2015-16 is the attention being paid by the regulator to the Kingdom’s nascent mortgage industry. As with many economies in the region, mortgages have traditionally played only a small part in the financial workings of the housing market, due largely to the precepts...
What is the liquidity outlook for banks in Saudi Arabia, particularly in view of today’s challenging economic environment?
Despite the decline in world oil prices and the slowdown in world economic growth, the Saudi economy in general, and the financial sector specifically, have remained in good shape. Real economic growth in 2015 was 3.5%, a slight decline from the 3.6% seen in 2014, but still a very good performance. This growth was balanced, with all sectors...
When the price of crude oil began its decline in mid-2014, banking regulators across the GCC examined the liquidity in their respective banking sectors. The centrality of hydrocarbons activity in regional economies means that large alterations to spot prices and futures have the potential to significantly affect the liquidity, and therefore...
Given the drawdown in government deposits and continued sale of government bonds, are you concerned about liquidity constraints in the sector?
With three of its domestically licensed institutions in the regional top 10 in terms of net assets, Saudi Arabia’s banking sector is one of the largest and most vibrant in the Middle East. Historically it has thrived on the rise of high-value lending derived from the government’s infrastructure programmes, but recent years have also seen local...
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