Saudi economy needs time to absorb reforms, says SAMA governor

Saudi Arabia’s economy needs more time to absorb and react to the structural changes taking place as part of the Kingdom’s national reform plans, said Ahmed Alkholifey, governor of the Saudi Arabian Monetory Authority (SAMA), the country's central bank.

In 2016, the financial sector recorded strong performance, with Saudi money supply growing by 0.8 percent, he was quoted as saying by the Saudi Press Agency. Assets of commercial banks rose by 2.2 percent to over SAR 2.5 trillion, while loans to the private and public sectors increased by 2.8 percent to SAR 1.4 trillion.

Average capital adequacy ratio also rose to 19.5 percent, well above the global minimum limit.

Alkholifey added that the banking system’s profitability remained strong in 2016, when compared to global peers.

Return on assets and equity stood at 1.8 percent and 12.6 percent, respectively in 2016.

Bank dividends reached SAR 10.1 billion in H1 2017, compared to SAR 16 billion in 2016.

The central bank is focusing on enhancing banking awareness and financial inclusion across the Kingdom to boost saving rates and diversify the economic base, Alkholifey added.