SAB allocates provisions to hedge against higher bad debts in 2024: CEO

Tony Cripps, CEO of Saudi Awwal Bank (SAB)

Saudi Awwal Bank (SAB) developed risk model in response to rising interest rates, CEO and Managing Director Tony Cripps said.

The bank has taken some provisions to hedge against a rise in bad debts in 2024, he told Al-Arabiya.

The cost of risk (COR) has been targeted between 30 and 60 basis points, which may hit the upper end of the spectrum but remains in the conservative range, the CEO said.

Cripps explained that SAB’s liquidity levels are in “good” condition and exceed regulatory requirements, adding that the bank will resort to capital markets when necessary.

Deposit and lending growth were strong, as the average ratio of weighted loans to deposits is about 80%, which is considered within acceptable levels.

Cripps indicated that high-interest rates have both positive and negative effects, leading to higher funding costs for corporate clients than individual clients.

There is no rising trend in the impact of high-interest rates on credit and bad debts yet, he highlighted, pointing out that risks tend to rise in the future.

Cripps expected tighter credit conditions worldwide, extending beyond Saudi Arabia, by the coming year.