Saudi banks achieve the strongest quarterly profits in two decades. Will the momentum continue?

Saudi banks continued to achieve a record quarter, which was open in 2025 with the highest quarterly gain more than two decades, in an indication of the momentum seen by the banking sector in collaboration with the most important economic transformations in the kingdom, despite global turmoil. The profits raised for the sector during the first quarter of this year amounted to 22.3 billion Riyals, a 20% growth for the same period last year, and with an increase in profits of the previous quarter, which amounts to 20.9 billion Riyals. At the forefront of this growth, Al -Rajhi Bank, which was the largest profits, was drawn after it contributed about 41.5% of total growth in the bank profits. The bank’s contribution to the net profit of the sector rose to 26.5%, compared to 23.6% in the first quarter of 2024, which will strengthen its position as a major player in the sector. Al -Rajhi also performed Saudi banks in terms of profit growth, which amounted to 34% year -on -year, at a time when other major banks such as the first Saudi bank, the national national, the Saudi French, the country, the investment and the development bank had a decline in its contribution within the gains. The Saudi National Bank still maintains the forefront of the sector in terms of the amount of profits, but the difference between IT and “Al -Rajhi” has decreased to only 116 million Riyals, compared to a difference that exceeded 600 million Riyale in the first quarter of last year, reflecting the intensification of the competition between the largest banks in the Saudi market. Positive expectations for the Saudi banking sector are consistent with the estimates of financial expertise homes, locally and internationally, around the future of Saudi banks, with a wide consensus that the sector will continue its strong performance through long -term structural engines. This increases the confidence in the stability of the banking system, and confirms the readiness to finance the most important economic and development transformations that the Kingdom to see within the framework of Vision 2030. Al -Rajhi Financial expected the ongoing growthomentum, driven by the increase in the frequency of corporate financing, and the increase in the activity associated with the Kingdom’s 2030 visual projects, especially in non -oil sectors. It also relies on the development of real estate financing and small and medium businesses as sustainable sources of growth. The current profit mutation comes at a time when Saudi banks are increasingly dependent on external financing, after the data has shown a gap between new loans and local deposits. In 2024, banks granted loans worth 371.8 billion rows, in exchange for an increase in deposits with only 218.9 billion rows, covering essential use of international debt markets to cover a financing gap of approximately 152.9 billion rows. The banks will be at the forefront of sectors leading to the growth of profits in the Saudi market during the year 2025, in addition to the sectors of communication, technology and healthcare, supported by new inclusion operations and initiatives to increase efficiency, according to Riyadh Financial Company. Saudi banks will continue to support economic growth without exposing their financial centers to significant risks, even with an increase in dependence on external financing, according to the “S&B” financial services. The levels of external debt are likely to remain the net external debt of the sector by the end of 2024 with about 4.1% of the total borrowing, only about 34 billion rows. Foreign obligations are expected to double over the next three years, but will remain at a management level, at most 4.1% of the total lending by 2028, according to a report issued by S&B. Precious Real Estate Finance. A profitable leverage. Property financing is one of the most important pillars in the governor of Saudi banks, where real estate mortgages represent 23% of total loans by the end of 2024, equivalent to approximately 180 billion dollars. These loans offer a good profit margin thanks to the fixed composition and low risks, due to the dependence on public service or employees of the major Saudi businesses. Despite the rise of a tendency towards the sale of these assets to the Saudi solid property financing business or to think about their jurisprudence, banks, whether due to the strength of the current returns or because the secondary financing documents in the real estate are still in the form of training. “S&P” expected the market -backed security market to be slowly formed in the coming years, improving the appetite of investors and the stability of organizational frameworks.