Saudi banks end private lending aversion - FT.com

A combination of a huge stimulus announced this year and rock-bottom interest rates are trickling through to Saudi Arabia’s banks, which are resuming lending to the private sector at the fastest pace in two years, economists say.

Bank lending to companies was severely curtailed after an economic slowdown induced by the collapse of Lehman Brothers, Dubai’s well-publicised debt problems and the default of two of the kingdom’s family holding companies.

Yet Saudi bank credit to the private sector expanded 7.1 per cent in May, the fastest rate of growth in two years, according to Banque Saudi Fransi in Riyadh.

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