Saudi banks' asset quality metrics to remain strong in 2025: Fitch

Fitch Ratings stated that operating conditions in Saudi Arabia remain healthy, and will likely continue supporting Saudi banks' expansion in 2025.
 

"We expect Saudi banks' asset quality metrics to remain strong in 2025, underpinned by the healthy operating environment," the agency said.
 

It added that customer deposits grew by only SAR 37 billion in Q3 2024, due to the banks’ increased reliance on external liabilities, diversifying their funding structures, and sourcing foreign-currency funding due to an increased demand for foreign-currency financing.
 

Strong gains on securities and trading drove a SAR 1.4 billion increase in non-interest income for Saudi banks in Q3 2024, leading to a SAR 0.5 billion rise in combined profit.
 

According to the agency, the sector's external liabilities reached a record high of SAR 400 billion in September 2024 (11% of total liabilities). Accordingly, the sector's net foreign assets position turned negative for the first time.
 

Total provision coverage of impaired financing remains healthy, Fitch said, expecting Saudi banks' asset quality metrics to remain strong in 2025, underpinned by the healthy operating environment.