Saudi credit growth to pick up in H2: BofAML

Saudi credit growth is expected to accelerate in the second half of 2018, after rising 1 percent month-on-month in April - the fastest pace seen for quite a while, Hootan Yazhari, managing director for frontier markets at Bank of America Merrill Lynch, told Bloomberg on Tuesday.

Saudi banks were unable to grow their loan books in the first quarter, which weighed on profitability. This forced lenders to shore up their investment books, which tend to carry lower yields than loan books, Yazhari said.

Commenting on the jump in point-of-sales transactions in April, Yazhari said that while the year began with pretty significant government handouts to Saudi citizens, this has not necessarily translated into much stronger POS data.

“POS data by virtue of it having been so weak previously, we see the comparison effect really moving up now,” he said.

Saudi POS transactions rose 18 percent to SAR 19.4 billion in April from SAR 16.5 billion a year earlier, official figures from the Kingdom’s central bank showed. POS transactions had climbed 20 percent year-on-year in March.