Monday 11 January 2010

Lending slowdown, provisions hit Saudi banks

Three Saudi banks posted fourth-quarter earnings below forecasts, hit by a slowdown in lending growth and higher provisions, with Saudi Hollandi Bank making its first quarterly loss in two years.

The earnings could reignite investor fears over the impact of the global crisis and a multi-billion dollar default by two family-owned businesses although local officials said the Saudi financial system has withstood these with little damage.

Saudi banks also bore the brunt of a slowdown in lending in 2009 after years of fast credit growth that brought the domestic banking system to its limits.

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