SAB CEO: Growth in banking sector still strong, external financing ‘positive’

Speaking in an interview with Al Arabiya TV on the sidelines of the IMF and World Bank annual meetings, Cripps highlighted that the Saudi-listed lender has accelerated at a pace slightly above the sector average, backed by its broad base of financially strong customers.

Commenting on liquidity in the banking sector, Cripps indicated that Saudi banks’ ability to obtain financing from outside the Kingdom represents a positive trend, as it directly contributes to injecting more liquidity into the financial system, while also boosting international investor confidence.

He further stated that, given the fast growth in loans compared to deposits, it is only normal for banks to continue tapping capital markets to obtain funding and liquidity.

SAB has been active in the market several times this year; and if loan growth sustains at current levels, the bank plans to return to the US capital markets next year, said the CEO, highlighting the growing interest from Asian investors seeking exposure to debt instruments and equities.

On SAB’s credit portfolio, Cripps said it is highly balanced and not overly concentrated in specific sectors, with risks distributed across multiple industries in line with Saudi Vision 2030 priorities. He also noted the bank’s exposure to major national projects in the Kingdom.

SAB, according to the CEO, follows a comprehensive portfolio approach in serving the SMEs sector, which witnessed a solid uptrend over the past two years.

“The real estate sector has continued to grow strongly this year, despite expectations that rising interest rates might lead to a pullback. Instead, the sector demonstrated moderation in its rapid growth pace that had been characterized 2021 to 2023,” said the top executive.

He added that SAB has been advancing at a slightly faster pace than the sector average, given its client base that includes high-net-worth individuals, homeowners, and investors. Looking ahead, he expected the bank’s performance to remain at current levels or marginally lower.

On the recent regulatory changes, such as idle land fees and rental cap adjustments, Cripps said they are not of concern for the time being, as demand for real estate and mortgages stand firm.

“Thanks to the continued population growth in Riyadh, the need for new housing will keep increasing,” he said.

Moreover, the implementation of the idle land tax will encourage development and boost supply, which bodes well for the overall market stance, the CEO noted.

Regarding cash distributions, Cripps expected SAB to maintain its current payout levels in the coming years, noting commitment to a consistent and stable dividend policy.