Saudi Arabian banks are lending the most in at least five years as the government’s plan to invest $500 billion in new housing, infrastructure and industry boosts confidence in the kingdom’s economy.
Bank credit climbed 13 per cent in the 12 months ending in May to 868 billion riyals (Dh849 billion), according to central bank data. Ten of 11 publicly-traded banks reported raising the value of their loan portfolios in the first six months.
“Bank lending to the private sector will increase by 14 per cent this year,” Paul Gamble, Riyadh-based chief economist at Jadwa Investment Co., said in response to e-mailed questions. “Strong economic-growth prospects have reassured banks about the lending environment and spurred demand for credit. Although the loan-to-deposit ratio has edged up in the past couple of months, banks remain liquid and fairly keen to lend.”
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