Unprecedented Earnings:Saudi Banks Achieve Record Profits in 2024
Riyadh, Saudi Arabia – In a remarkable display of financial resilience and growth, Saudi Arabia’s commercial banking sector reported record-breaking profits in 2024. This historic surge not only underscores the robustness of the Kingdom’s economy but also highlights the strategic initiatives and technological advancements driving the sector forward.
Key Highlights:
- Record Profits: Saudi banks collectively achieved profits exceeding SAR 20.52 billion in Q3 2024, marking a 13.49% increase compared to the same quarter in 2023.
- Leading Banks: The National Commercial Bank, Al Rajhi Bank, and Riyad Bank emerged as top performers, showcasing impressive growth rates and financial strength.
- Digital Innovation: A significant contributor to these gains has been the sector’s aggressive digital transformation and diversification strategies.
Alinma Bank’s Stellar Performance
Alinma Bank stood out with a net profit of SAR 4.3 billion by the end of Q3 2024, reflecting a 22.3% year-over-year growth. This remarkable achievement was fueled by robust growth in core banking activities, strategic investments, and enhanced digital services. The bank’s total assets surged to SAR 267 billion, a 14.8% increase, while its financing portfolio expanded by 15.9% to SAR 196 billion. Customer deposits grew by 16%, totaling SAR 209 billion.
Dr. Abdulmalik bin Abdullah Al-Hogail, Chairman of Alinma Bank, credited the bank’s success to its commitment to sustainable growth, customer-centric innovations, and prudent risk management. “Our focus on digital transformation and operational excellence has been pivotal in achieving these record profits,” he stated.
Saudi Awwal Bank (SAB) Breaks New Ground
Saudi Awwal Bank reported a net profit of SAR 4.1 billion in the first half of 2024, a 23% increase from the same period in 2023. Total operating income rose by 10% to SAR 6.9 billion, driven by growth in net loans and advances, which increased by 22% to SAR 242 billion. Customer deposits also saw a significant rise, growing 19% to SAR 264 billion.
Chairwoman Lubna Olayan emphasized the bank’s transformation strategy and focus on digital innovation as key factors behind this growth. “Our ability to adapt to changing market dynamics and invest in cutting-edge technologies has been instrumental in our success,” she noted.
Saudi National Bank (SNB) Maintains Strong Momentum
The Saudi National Bank reported a net profit of SAR 10.3 billion for H1 2024, a 2.3% increase compared to H1 2023. This growth was supported by a 3.6% rise in total operating income, reaching SAR 17.9 billion. The bank’s total assets increased by 4.9% to SAR 1.088 trillion, with a notable 7.2% growth in mortgages contributing to a 5.9% rise in overall financing.
SNB’s consistent performance reflects its diversified portfolio, robust risk management practices, and strategic focus on expanding its retail and corporate banking services.
Sector-Wide Profit Surge
Saudi banks listed on the stock market collectively posted record profits in Q3 2024, with total earnings reaching SAR 20.52 billion, a 13.49% increase from Q3 2023. National Commercial Bank led the pack with a net profit of SAR 5.37 billion, followed closely by Al Rajhi Bank with SAR 5.1 billion, marking a 22.8% growth. Riyad Bank recorded the highest growth rate among Saudi banks, with profits increasing by 27% to SAR 2.65 billion.
Factors Driving the Record Profits
- Economic Diversification: Saudi Arabia’s Vision 2030 initiative has been a key driver, promoting diversification beyond oil and creating new opportunities for financial institutions in sectors like tourism, entertainment, and technology.
- Digital Transformation: Banks have heavily invested in digital infrastructure, enhancing customer experiences and operational efficiency. Innovations such as Alinma Bank’s “iz” app, targeting the youth demographic, have attracted new customers and boosted engagement.
- Regulatory Support: Proactive policies from the Saudi Central Bank have fostered a stable and supportive environment, enabling banks to thrive amid global economic uncertainties.
- Prudent Risk Management: Effective risk assessment and management strategies have minimized non-performing loans and ensured asset quality.
- Increased Lending Activity: The surge in mortgage and personal loan demand, coupled with strong corporate lending, has significantly contributed to revenue growth.
Challenges Ahead
Despite the impressive growth, Saudi banks face potential challenges, including global economic fluctuations, geopolitical tensions, and the impact of volatile oil prices. Additionally, increasing competition within the financial sector, both domestically and internationally, will require continuous innovation and strategic agility.
Future Outlook
Looking ahead, Saudi Arabia’s banking sector is poised for continued growth. The ongoing implementation of Vision 2030 will drive further diversification and development, opening new avenues for financial institutions. Banks are expected to play a crucial role in financing large-scale projects, supporting SMEs, and advancing digital banking initiatives.
Industry experts predict that the sector will continue to benefit from strong economic fundamentals, supportive government policies, and a growing emphasis on sustainability and green financing.
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Conclusion
The record profits achieved by Saudi banks in 2024 reflect the sector’s resilience, adaptability, and strategic foresight. As the Kingdom continues to evolve economically and digitally, its banking industry is well-positioned to sustain growth, drive innovation, and contribute significantly to national development goals.
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