The Banking Executive Issue - October 2025 Issue

Saudi Banks debt at listed Saudi companies de- clined by about 15%. However, most of this decline stemmed from a $55 billion-$60 bil- lion debt repayment by Aramco and a debt reduction in the materials sec- tor led by Saudi Arabian Mining Co. and Saudi Basic Industries Corp. (Sabic). Excluding Aramco, the data suggests about a 10%-12% increase in total debt over the period, with the utilities, real estate investment trust, healthcare, and transportation sec- tors driving the growth. According to S&P, the average share of short-term debt in total debt re- mained broadly stable across all sec- tors, at about 35%-36% over 2020-2024, but there is significant variation by sector. Sectors with higher working capital funding needs, such as consumer durables and apparel, pharmaceuti- cals, and capital goods, are more re- liant on short-term funding and may face refinancing risks if performance declines. Listed corporates' short-term corpo- rate debt grew by 25%-27%, outpac- ing the 10%-12% growth in total cor- porate debt. At the system level, short-term credit as a proportion of total loans decreased to 36% in 2024 from 39% in 2020, down from 66% in 2000, largely due to the rapid rise in long-term mortgages, said S&P in it review. Listed Saudi companies' total debt to ebitda improved over 2020-2024, bucking the upswing in borrowing. This was thanks to a solid expansion in profits over the period, it added ISSUE 202 OCTOBER 2025 the BANKING EXECUTIVE 39