Saudi’s banking sector returned to sturdy industry performance, highlighting a year-on-year (YoY) increase in net profit by 22.83 percent in Q1 2022. Total assets of the banking industry have also increased by 3.75 percent as compared to December 31, 2021, according to a new report.
KPMG’s latest Banking perspectives: Saudi Arabia 2022 publication, titled “Purpose-led banking,” observed that at the close of 2021, the banking industry saw a 40.15 percent increase in profit despite repeated waves of the Coronavirus pandemic and its severe impact on the sector.
The expected credit loss (ECL) charge declined by 11.47 percent YoY in Q1 2022.
Meanwhile, total customer deposits reported modest growth of 3.90 percent since December 31, 2021, evidencing that liquidity has not been a challenge to date.
Encouraging money-saving habits
According to the professional services company, one of the primary objectives of Saudi’s Financial Sector Development Programme (FSDP) is to promote and enable financial planning by driving the expansion of savings products, strengthening the savings ecosystem, as well as enhancing financial literacy.
Commercial banks have created new savings products as a response to some of the ambitious targets set by the FSDP which were to increase the total amount held in savings products and increase the variety of savings products.
SAMA driving change
“SAMA has been a proponent of change and development in the financial sector, in line with the objectives of FSDP, by taking new players in the financial sector under its wing and embracing a positive attitude towards new technology to usher banking into the future,” commented Khalil Al Sedais, Office Managing Partner – Riyadh at KPMG in Saudi.
Banks are responding to this shift and to the requirements of the government to achieve greater economic development while considering the threats and opportunities permeating an evolving technological and risk environment.