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S&P World expects company lending to stay the principle driver of progress within the Saudi banking sector, noting that credit score dangers within the company sector are nonetheless beneath management.
The company defined in its report that whole credit score to the personal sector elevated by 60% in the course of the interval from 2020 to 2024, whereas credit score to listed Saudi firms elevated at a slower charge, ranging between 10 and 12%, pushed by utilities, actual property, well being care, and transportation (aside from Saudi Aramco).
It indicated that regardless of the rise in company debt and the rise in financing wants within the interval main as much as 2030, it expects company credit score dangers in Saudi banks to stay beneath management because of the reasonable enchancment in company monetary leverage.
She identified that the comparatively low ranges of private and non-private debt in Saudi Arabia, supported by giant sovereign reserves, represent a powerful protecting issue that enhances monetary stability, and because the non-oil economic system continues to develop, banks might want to steadiness progress alternatives and handle dangers correctly, making certain that credit score enlargement helps financial diversification with out amplifying dangers.
It anticipated that the credit score high quality of the rated firms would keep relative stability, regardless of the rise in financing wants for capital expenditures, investments, digital transformation and industrial diversification, attributing this primarily to the non-oil progress alternatives offered by Imaginative and prescient 2030, and strong profitability because of value optimization.
