Saudi Listed Banks’ Net Loans Rise 7% to $865.2Bn in Q2

RIYADH: Net loans at Saudi Arabia’s 10 listed banks rose 7 percent year on year to SR3.25 trillion ($865.2 billion) by the end of the second quarter of 2026, while deposit growth outpaced lending for a second consecutive quarter, according to Al Rajhi Capital.

Deposits increased 9 percent to SR3.15 trillion, while net loans grew 2 percent from the previous quarter and deposits rose 3 percent, the Aug. 18 report showed. The aggregate loan-to-deposit ratio stood at 103 percent.

The slower pace of lending growth comes as Saudi banks shift their focus toward profitability and returns rather than expanding loan volumes, with some of the Kingdom’s largest lenders lowering their 2026 loan-growth forecasts, according to Al Rajhi Capital.

“Top three banks revised the guidance downwards as focus shifts to value over volume,” the analysis said.

Banks classified by the report as corporate-focused recorded annual loan growth of 10 percent, compared with 4 percent among retail-focused lenders. Their deposits increased 11 percent and 7 percent, respectively.

Largest banks temper outlook

Al Rajhi Bank, SNB and Riyad Bank lowered their loan-growth guidance for 2026 as the sector shifted its focus toward returns rather than lending volumes, according to the report.

Al Rajhi now expects low-single-digit growth, compared with its previous low- to mid-single-digit forecast. SNB cut its outlook to mid-single-digit growth from high-single-digit, while Riyad Bank expects mid- to high-single-digit expansion, down from high-single-digit growth.

Bank AlJazira moved in the opposite direction, raising its forecast to low-teens growth from a previous high-single-digit projection.

Mid-sized lenders lead growth

Bank AlJazira recorded the fastest loan growth, with its portfolio expanding 17 percent to SR120.96 billion. Bank Albilad followed with a 15 percent increase to SR133.42 billion, while Saudi Awwal Bank’s net loans rose 13 percent to SR320.21 billion.

Alinma Bank registered growth of 12 percent, followed by Arab National Bank at 10 percent and the Saudi Investment Bank at 8 percent. Riyad Bank and Banque Saudi Fransi each reported 7 percent growth.

Al Rajhi Bank and Saudi National Bank, which had the sector’s largest net loan portfolios at SR762.10 billion and SR739.56 billion, respectively, each recorded growth of 3 percent.

Despite more moderate sector lending growth, the net interest margin improved by five basis points annually to 2.96 percent, helping net funded income rise 9 percent to SR32.6 billion.

Separately, Saudi Central Bank data showed system-wide bank credit rising 7.3 percent year on year to SR3.42 trillion in June, while deposits increased 8.9 percent to SR3.13 trillion.  

The central bank figures use a different reporting scope from Al Rajhi Capital’s measure of net loans at listed banks and are therefore not directly comparable.