The Banking Executive Issue - October 2025 Issue

Saudi Banks Corporate lending will remain at the core of the Saudi banking sector's growth, currently accounting for 55% to 60% of banks' loan books, according to S&P Global Ratings. The total credit to the private corpo- rate sector increased by 60% over 2020-2024, while credit to listed Saudi companies rose by a slower 10%-12%, driven by utilities, real es- tate, healthcare, and transportation (excluding Saudi oil giant Aramco), stated S&P in its report titled "Saudi Banks: Risks From Rising Corporate Debt Remain Contained. Despite growing corporate debt and the likelihood of high funding needs in the run-up to 2030, S&P Global Ratings expects Saudi banks' expo- sure to corporate credit risk to re- main contained thanks to a moderate improvement in corporate leverage. Between 2021 and 2024, the credit that Saudi banks extended to the cor- porate sector rose to SAR1.6 trillion from about SAR1 trillion. The total banking credit in the kingdom ex- panded to SAR3 trillion from about SAR2 trillion, stated the report. In addition to domestic bank financ- ing, the build-up of external debt ac- celerated, not only for banks and the sovereign, but also for the corporate sector, with a notable increase in debt securities issuance. Having said that, Saudi sovereign wealth fund Public Investment Fund (PIF) and Saudi Arabian Oil Co. (Aramco) still dominate the sector, it added. S&P said it expects the debt capital markets to play an increasing role as a funding source in the kingdom. Between 2020 and 2024, total gross the BANKING EXECUTIVE 38 ISSUE 202 OCTOBER 2025 RISING CORPORATE DEBT NOT A MAJOR THREAT TO SAUDI BANKS