Saudi Bank Lending to Recover in 2010

Saudi Arabia’s bank lending growth is set to recover this year as confidence in the global economy rises and the domestic banking system is liquid and well capitalised, the country’s central bank governor said. Muhammad al-Jasser of the Saudi Arabian Monetary Agency also said that strong supply in the real estate sector will help keep inflation in check in the world’s largest oil exporter, adding that this year’s non-oil sector growth to be similar to that of 2009.

Saudi bank credit growth was flat throughout much of 2009 due to global turmoil and after defaults by local family firms. Bank credit to the private sector edged up 0.2% in January 2010 after hitting a 13-month low in the previous month. “The financial system did not suffer any damage throughout the crisis and banks are well positioned to lend in 2010 as confidence in the global recovery takes hold,” al-Jasser said on 7 March 2010 on the sidelines of a meeting at the Bank for International Settlements. “It (lending growth) should pick up in 2010. The banking system is very solid, very liquid and very well capitalised.” - Gulf Times