The Saudi banking sector delivered strong financial performance during the first half of 2025, supported by rising net profits, healthy credit growth, and stable macroeconomic conditions. Saudi banks benefited from increased financing activities, expanding investments, and strong liquidity despite global economic uncertainties and oil market volatility.
Strong Growth in Deposits and Loans
Saudi banks continued to record steady deposit and loan growth across major institutions including Al Rajhi, SNB, Alinma, and Riyad Bank. Deposit growth remained healthy due to strong retail banking activity and government-backed economic expansion projects under Vision 2030.
Profitability and Operating Performance
The sector’s profitability remained impressive in 1H2025. Aggregate net profits rose by approximately 19% year-on-year to SAR 45.2 billion, driven by higher net special commission income and financing growth. Operating income also continued to improve, reflecting strong demand for banking products and services.
Asset Quality and Capital Strength
Saudi banks maintained strong asset quality with relatively low non-performing loan (NPL) ratios and healthy coverage ratios. Capital adequacy levels remained above regulatory requirements, providing banks with resilience against economic fluctuations and supporting future expansion.
Valuation and Investment Outlook
The report highlights RIBL, Alinma, and BSF among the top investment picks based on strong financial indicators including ROE, loan growth, capital adequacy, and valuation metrics. Riyad Bank particularly stands out due to its robust earnings growth, attractive dividend yield, and strategic digital transformation initiatives.
Conclusion
Overall, the Saudi banking sector remains well-positioned for long-term growth. Strong profitability, healthy liquidity, expanding credit portfolios, and supportive economic reforms continue to create opportunities for investors and financial institutions. Banks with strong digital transformation strategies and efficient capital management are expected to outperform in the coming years.