The financial landscape in Saudi Arabia has experienced significant growth, with finance companies reporting a 13 percent increase in total assets, reaching SR64.2 billion ($17.12 billion) in 2023. This upswing was unveiled by the latest figures from the nation’s central bank.
These firms have not only seen their assets grow; their paid-up share capital also climbed by 6 percent from the previous year, hitting SR15.5 billion, underpinned by heightened investment endeavors and a supportive economic environment.
The central bank, also known as SAMA, indicated that the financial portfolio of these entities saw a 12 percent year-on-year increase, amounting to SR84.7 billion in 2023.
The report also shed light on the net income of the sector, which stood at SR1.7 billion in the prior year.
Another significant rise was observed in the real estate refinancing sector’s total assets, which soared by 48 percent to SR31 billion in 2023.
When analyzing the loan portfolio distribution, the retail sector took the forefront with 77 percent, followed by micro, small and medium enterprises (MSMEs) at 20 percent, and the corporate sector trailing at 3 percent.
The report also emphasized the strides made in Saudization, highlighting that Saudis represent over 80 percent of the workforce in financial companies within the Kingdom.
“By the end of 2023, the number of employees in finance companies surpassed 6,000, with Saudis comprising 86 percent of this workforce,” SAMA stated.
In the last quarter of 2023, finance companies extended loans totaling $4.6 billion, marking a 9.3 percent year-on-year increase, according to a report by the Kingdom’s Small and Medium Enterprises General Authority.
In contrast, banks dispensed credit facilities amounting to $68.9 billion during the same period, a 21.1 percent increase from the previous year.
The central bank’s monthly bulletin for May highlighted that the Saudi banking sector’s loans escalated to SR2.68 trillion in April, reflecting an 11 percent rise from the corresponding month in the previous year.
Within the banking sector, personal loans accounted for 47 percent of the total lending, while corporate loans made up the remaining 53 percent, as per SAMA’s analysis.