Despite a challenging global and regional environment, Saudi banks performed reasonably well in 2019 and continued to invest in technology and people to assist in the growth of the banking sector, according to a new report by global audit, tax and advisory services firm KPMG.
The ‘Kingdom of Saudi Arabia Banking Perspectives 2020’ report further noted that banks continue to be well-positioned to take advantage of the improving economic outlook and an evolving technological landscape, despite subdued growth in recent years across credit underwriting and deposits.
Saudi banking industry is one of the biggest financial sectors by assets in the Middle East and North Africa (MENA) region, and has weathered the storm of recent economic downturn relatively well.
Overall, total assets across the Kingdom’s listed banks grew by 11.98% in the fiscal year 2019 with a healthy 4.46% growth in net profits before Zakat and income tax. This was coupled with a 10.51% growth in the total deposit base across these banks.
After a decade of global financial crisis, banks face fresh challenges from new-age disruptive forces driven by technological changes, regulatory developments, evolving growth strategies and evolving market demand.
However, despite recent challenges, Saudi Arabia has witnessed a robust growth in the adoption of financial technology, partly due to the banking sector’s cognizance of its potential to be a major disruptor.
While lending to the corporate sector has traditionally been the preferred growth tool for most Saudi banks, the Kingdom’s increasing banking penetration, housing demand and improved credit reporting system are facilitating strong credit growth across the retail and SME segments.
“It is up to the corporates now to align their strategies and work with the disruptive forces to cater to evolving market demand and potential, while maintaining robust governance,” the report also said.
Comments
{{DisplayName}}
{{ElapsedTime}}