Saudi Banking Sector - 1Q-2016

The Saudi banking sector’s balance sheet in 1Q-2016 stood at SAR 2,225bn, depicting a jump of 2.8%YoY and 0.7%QoQ. Total loans weighed in at 65.5% of the total assets, whereas deposits accounted for 85% of total liabilities. The banking sector balance sheet has grown at a 10-year CAGR of 11.3%.
The Saudi banking sector has a total of 12 listed banks and other non-listed banks. In term of balance sheet size, National Commercial Bank (NCB), with assets of over SAR 453.3bn is the biggest bank in the Kingdom, accounting for 20.6% of the total market, followed by Alrajhi bank with an assets base of SAR 323.3bn (14.7% of market share). Samba and Riyadh Bank both account for more than 10% each of the total banking assets.
Out of the total 12 banks, 4 banks namely Bank Alrajhi, Bank Alinma, Bank Albilad and Bank Aljazira are Shariah compliant banks, accounting for 24.3% of the total banking assets. Alrajhi is the biggest Shariah compliant bank in the Kingdom, controlling almost 60.4% of the total market share.

NIMs Under Pressure
The sector as a whole saw a drop in its net interest margins.
Saudi Fransi’s NIMs at 0.43% were the lowest in the sector in Q1-2016, followed by Alrajhi as NIMs declined to 0.50%.The lowest fall was witnessed by Samba as its NIMs declined from 0.77% in 1Q-2015 to 0.7% in 1Q-2016. Overall the sector showed an increase of 81% on return on savings and time deposits.

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