Novartis signs deal to help Saudi Arabia expand its biopharma capabilities 

Riyadh: In a likely boost to retail spending, more Saudis availed of personal finance loans during the first three months of 2022 as the Kingdom continues to recover from the after-effects of the pandemic.

According to the latest figures from the Saudi Central Bank, total loans provided by Saudi Arabia’s finance companies grew 4.4 percent to SR71.1 billion ($18.96 billion) at the end of the first quarter of 2022, from SR68.2 billion in the previous quarter. 

The growth came mainly from personal finance loans, which increased SR1.8 billion to hit SR16.3 billion at the end of the first quarter. It was supplemented by another increase of SR0.5 billion which banks classify as “other” loans.

The central bank data further revealed that real estate loans increased by 1.3 percent to SR26 billion in the first quarter compared to the last quarter of 2021. Out of these, the retail loans made up 85.4 percent at the end of the first quarter, compared to only 14.6 percent share of real estate loans for corporates.

Compared to the fourth quarter of 2021, the real estate loans for corporates recorded a higher growth rate at 4.74 percent against 0.72 percent increase that was seen in retail loans.

As for the total non-retail lending by finance companies, it has increased by 3.9 percent totaling SR17.5 billion at the end of the first quarter. Over the same period, retail loans grew 4.5 percent to SR53.6 billion. Compared to the same quarter last year, retail lending by finance companies increased by 22 percent from SR43.9 billion.

Looking at the breakdown of non-retail loans by borrower sector, the construction industry constituted the highest share at 23 percent and totaled around SR4 billion in the first quarter.

The commerce sector came second with having 21.5 percent share, followed by the services sector which claimed 15.5 percent share in the first quarter.

As for the breakdown of non-retail borrowers by their size, the aggregate share of micro, small- and medium-size companies stood at 87 percent, with the remaining share contributed by other non-SME corporates.

Saudi finance companies and real estate refinance companies reported aggregated assets of SR70.3 billion ($18.75 billion) at the end of the first quarter of 2022.

These results include the Saudi Refinance Co. with its share of contribution standing at nearly a quarter of the total.

The finance companies’ assets increased by 5 percent from the end of the previous quarter and by 20.7 percent from the same quarter of 2021. The non-real estate finance companies constituted around 55 percent of the total assets at the end of Q1, while the companies specializing in real estate finance made up around 21 percent.

Net Income generated by all the finance companies increased from SR103 million in the last quarter to SR893 million in the first quarter of 2022. This means the net income grew nearly 39-fold quarter-on-quarter.

The surge was mainly attributed to an increase in net income of non-real estate finance companies from SR19 million in the fourth quarter of last year to SR776 million in the first quarter of 2022.

The data provided by the Central Bank did not specify the share of the Saudi Refinance Co. However, the growth in this company’s assets stands out compared to other groups.

When compared to the first quarter of 2021, the net income of non-real estate finance companies almost doubled, to SR539 million, up 98 percent from SR271 million in the fourth quarter of 2020.