Saudi banks, in investor presentations released last week, expressed optimism about their 2025 performance over 2024. Their positive outlook is driven by robust lending growth, stable or enhanced special commission margins, and a lower cost-to-income ratio, while the cost of risk (provisions as a percentage of total loans) is expected to remain at similarly low levels as in 2024.
All listed banks that released investor presentations forecast growth in their lending portfolios, driven by strong credit demand from both corporate and individual sectors. The Saudi Investment Bank (SAIB) topped the list, expecting its lending portfolio to expand by over 15. Alinma Bank, Arab National Bank (ANB), and Saudi Awwal Bank (SAB) each forecast growth of approximately 15%.
|
Saudi Banks Outlook for 2025 (Lending Portfolio) |
|
|
Bank |
Loan Portfolio Growth (YoY) |
|
Al Rajhi Bank |
8% - 10% |
|
BSF |
10% - 12% |
|
Alinma Bank |
13% - 17% |
|
Bank AlJazira |
10% - 12% |
|
ANB |
13% - 17% |
|
SNB |
10% - 12% |
|
SAB |
13% - 17% |
|
Riyad Bank |
10% - 12% |
|
SAIB |
Above 15% |
|
Bank Albilad |
Not yet published |
Al Rajhi Bank, Banque Saudi Fransi (BSF), and Bank AlJazira will likely witness an increase in net interest margins (NIMs) in 2025 year-on-year (YoY). The other banks expect to report either a stable or slight decline in NIMs YoY.
|
Saudi Banks Outlook for 2025 (NIMs) |
||
|
Bank |
NIMs in 2024 |
Outlook in 2025 |
|
Al Rajhi Bank |
3.13% |
Up between 5 and 15 bps |
|
BSF |
3.05% |
Up between 0 and 10 bps |
|
Alinma Bank |
3.70% |
Stable between 3.65% and 3.75% |
|
Bank AlJazira |
1.99% |
Up between 5 and 10 bps |
|
ANB |
3.79% |
Stable between 3.75% and 3.85% |
|
SNB |
NII Growth between 5% and 10% |
|
|
SAB |
2.85% |
Slight Down to 2.70% to 2.80% |
|
Riyad Bank |
NII Growth nearly 5% |
|
|
SAIB |
2.68% |
Slight Down to 2.45% to 2.55% |
|
Bank Albilad |
Not yet published |
|
Banks expect the cost of credit risk (provisions to total loans)to remain stable or improve this year compared to 2024, supported by high-quality lending portfolios and a favorable macroeconomic environment.
|
Credit Risk Forecast (2025) |
||
|
Bank |
Cost of Credit in 2024 |
Outlook in 2025 |
|
Al Rajhi Bank |
0.32% |
Stable between 0.30% and 0.40% |
|
BSF |
0.58% |
Stable between 0.50% and 0.60% |
|
Alinma Bank |
0.55% |
Up between 0.40% and 0.50% |
|
Bank AlJazira |
0.32% |
Slight down to between 0.35% and 0.40% |
|
ANB |
0.39% |
Slight down to between 0.40% and 0.50% |
|
SNB |
0.16% |
Stable between 0.10% and 0.20% |
|
SAB |
0.23% |
Slight down to between 0.25% and 0.35% |
|
Riyad Bank |
0.53% |
Up between 0.30% and 0.40% |
|
SAIB |
0.32% |
Stable between 0.30% and 0.35% |
|
Bank Albilad |
Not yet published |
|
All banks that released forecasts anticipated a decline in the cost-to-income ratio. BSF led the projections, expecting a drop of more than two percentage points. This improvement will be driven by net interest income growth outpacing cost increase.
|
Cost-To-Income Ratio Forecast (2025) |
||
|
Bank |
Cost-To-Income Ratio in 2024 |
Outlook in 2025 |
|
Al Rajhi Bank |
24.9% |
Cost reduction to less than 24.5% |
|
BSF |
35.3% |
Cost reduction to less than 33.0% |
|
Alinma Bank |
30.9% |
Cost reduction to less than 30.0% |
|
Bank AlJazira |
56.0% |
Cost reduction to less than 55.0% |
|
ANB |
33.0% |
Cost reduction to less than 32.0% |
|
SNB |
28.3% |
Cost reduction to less than 28.0% |
|
SAB |
30.6% |
Cost reduction to less than 30.5% |
|
Riyad Bank |
30.6% |
Cost reduction to less than 30.5% |
|
SAIB |
41.5% |
Cost reduction to less than 41.5% |
|
Bank Albilad |
Not yet published |
|
Listed Saudi banks reported consolidated net profits of SAR 79.6 billion in 2024, a 13.8% YoY increase. This growth was driven by the expansion of lending portfolios and the stability of credit costs.
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