Most banks in Saudi Arabia expect low double-digit to mid-teens growth in 2025, driven by corporate and mortgage lending, according to Al Rajhi Capital.

Banks believe that their net interest margin (NIM) sensitivity has now reduced and expect minimal impact from rate cuts. 


At the same time, they remain optimistic on the quality of loans and forecast limited financial stress, as their cost-of-risk guidance stays broadly in line with 2024, the brokerage said.

The Saudi banking sector’s net profits grew by 21% year-on-year (YoY) and were 4% above consensus in the fourth quarter of 2024. 

Retail banks such as Al Rajhi Bank, Saudi National Bank, Bank Albilad posted a beat of 8%, while corporate banks reported a miss of 2% on consensus. 

Overall, the net income of the banking sector in 2024 grew by 14%, supported by loan growth of more than 14% and support from non-finance income, which grew by almost 16% YoY amid a focus on cross-selling and leveraging growth from subsidiaries. 

Expected credit loss provisions were lower, especially for corporate banks, supporting bottom-line growth, the brokerage noted.

(Editing by Seban Scaria seban.scaria@lseg.com )