Saudi banks credit profiles remain solid: Fitch

Saudi banks maintain solid credit profiles, with financial metrics displaying lower sensitivity to economic downturns than most GCC peers, Fitch Ratings said in a new report.

The Saudi operating environment is favorable, as reflected in our ‘bbb+’ score, which is the highest in the GCC (along with the UAE). It is backed by still-high government spending, ongoing economic diversification and non-oil growth under Vision 2030, as well as progress on giga projects.

“Saudi banks have grown at roughly twice the GCC average since the pandemic, though growth began moderating in the second half of 2026. We estimate full-year 2025 growth remained strong at about 13%, but expect growth to slow to 10%–11% in 2026,” Fitch added. 

This moderation reflects natural credit saturation after several years of rapid growth, alongside intensifying competition for funding, which pushed the sector’s average cost of funding up by 30 basis points in Q3 2025 versus 2024, despite interest rate cuts and tighter capital regulations.

Funding and liquidity continue to be viewed as key rating strengths for Saudi banks, despite tighter conditions, and are expected to remain so in 2026. Banks have maintained solid liquidity buffers and strong access to diversified funding sources, supporting resilience amid moderating growth and a more competitive deposit environment.