Despite the difficulties of 2020, the Saudi banking sector remained resilient, amid banking assurances that the New Year would begin with financial health efficiency.
Talat Hafiz, Secretary-General and Spokesman of Saudi Banks, told Asharq Al-Awsat that the good performance of the Saudi banking sector during the current year was expected to continue in line with the projected improvement in the performance of the national economy.
“This is driven by preliminary growth estimates of the gross domestic product (GDP) at nearly 3.2%, increased by the forecast sustainable growth of the economic activity in the Kingdom,” Hafiz said.
He noted that the total assets of banks in Saudi Arabia amounted to about 3 trillion riyals ($800 billion) by the end of November 2020, an increase of 15.24 percent, compared to the same period in 2019.
“Total deposits with banks in the Kingdom amounted to about 1.9 trillion riyals ($507 billion), an increase of 11.95 percent compared to the same period in 2019,” he added.
According to Hafiz, the total volume of facilities provided to small, medium and micro enterprises (MSMEs) amounted to about 176 billion riyals ($47 billion) by the end of the third quarter of 2020, an increase of 52.41 percent compared to the previous year.
The senior banking official emphasized that Saudi banks, with the support of the Saudi Central Bank (SAMA), exerted clear and tangible efforts in support of private sector companies, especially to MSMEs, including individual customers.
“Within the endeavor to support the state’s efforts in combating the coronavirus pandemic and mitigating its expected financial and economic effects on the private sector, especially on the SMEs, the Central Bank has worked to prepare a program worth 50 billion riyals ($13.33 billion),” he revealed.
Hafiz said that more than 87,000 contracts were signed since the inception of the program until the end of November, while the value of postponing payments amounted to about 77.3 billion riyals ($20.61 billion). He added that the program was extended until the end of the first quarter of 2021.
One of SAMA’s programs is the guaranteed financing launched by the Central Bank, in cooperation with Kafalah, which enables MSMEs to obtain financing from banks and financial companies with a guarantee of 95 percent of the financing value, at a cost not exceeding 4 percent.
According to Hafiz, low-cost financing for MSMEs aims to provide additional support and enhance the creditworthiness of these enterprises. The budget allocated for this program amounted to 13.2 billion riyals ( $3.52 billion), he noted.
The Saudi Banks spokesman told Asharq Al-Awsat that the Saudi Central Bank pumped another 50 billion riyals ($13.3 billion) to enhance liquidity in the banking sector and enable it to continue its role in providing credit facilities to all its private sector customers.
The Saudi banks supported the private sector by adjusting or restructuring their finances, without any supplementary fees, in addition to supporting plans to maintain employment levels in the private sector, he underlined.
During the pandemic, Saudi banks took a wide range of qualitative measures in fulfillment of their societal and national obligations, he asserted.
