Saudi Arabia – Banking

Saudi Arabia is one of the world’s fastest growing banking markets. Commercial banks operating in the Kingdom are likely to be more efficient in near future on back of technological developments, and encouraging government policies.

Saudi Arabia has a middle-sized, “bank centric” financial sector. Saudi Arabian banks have been traditionally well capitalized, with good loan-to-deposit ratios and low exposure to foreign debt and toxic loans. Lacking a mortgage law, Saudi banks had little exposure to domestic property markets.

There are 13 domestic banks licensed in Saudi Arabia: The National Commercial Bank (NCB), the Saudi British Bank (SABB), Saudi Investment Bank, Alinma Bank, Banque Saudi Fransi, Riyad Bank, SAMBA Financial Group, Saudi Hollandi Bank, Al Rajhi Bank, Arab National Bank, Bank Al Bilad, and Bank Al Jazira.  Foreign banks licensed to operate branches in Saudi Arabia include Gulf International Bank (GIB), Emirates (NBD), National Bank of Bahrain (NBB), National Bank of Kuwait (NBK), Muscat Bank, Deutsche Bank, BNP Paribas, J.P. Morgan Chase, the National Bank of Pakistan (NBP), State Bank of India (SBI), and the Industrial and Commercial Bank of China.

There is 4 types of financial institutions in Saudi Arabia: Commercial banks, Industrial banks, Agricultural banks, The real estate banks.

The Kingdom’s financial system consists of the Saudi Arabia Monetary Authority (SAMA, Saudi Arabia’s central bank), licensed retail banks, private investment programs, specialized lending institutions, and the stock market. SAMA was established to supervise banks and financial institutions, manage monetary policy, oversee the financial and insurance systems, and to maintain soundness within the banking system. The banking sector has been organized under regulations stemming from a Royal Decree in 1966.  Bank licenses are issued by the Council of Ministers upon the recommendation from the Finance Minister and a review by SAMA. The government’s stake in commercial banks is less than 10 percent, as adequate monetary flows enable fair price funding. The Saudi financial system also contained of three autonomous government institutions, included because of their important role in providing financing for economic deficits, deposits with SAMA, and foreign currency holdings. These included : Pension Fund, The General Organization of Social Insurance, The Saudi Fund for Development.

In the financial services sector, the Capital Market Authority (CMA) licensed 91 foreign and local companies to provide financial and brokerage services. Major companies include BNP Paribas, Credit Suisse, Deutsche Securities, Goldman Sachs, JP Morgan, KKR, Societe Generale, and UBS among others.

The Banks & Financial Services sector jumped 9.2% YoY at the end of 2016, where the shares of just 4 banks have risen compared with 8 losing shares. The market value of Banking sector has reached SAR 429.3 billion (down 1% over the previous year) which is equivalent to 26% of the total market value. In addition, Banks & Financial Services sector was the most active within the market sectors in terms of value of shares as well as number of shares traded in 2016. The value of shares for Banks has reached SAR 219 billion, equivalent to 18.9% of the total value of outstanding shares during the year. While, the number of outstanding shares for the sector amounted to 14.2 billion shares, which represented 21% of the total volume traded during the year.

List of Banks in Saudi Arabia

National Licensed Commercial Bank in Saudi Arabia

  •          The National Commercial Bank
  •          The Saudi British Bank
  •          Saudi Investment Bank
  •          Alinma Bank
  •          Banque Saudi Fransi
  •          Riyad Bank
  •          Samba Financial Group (Samba)
  •          Saudi Hollandi Bank (Alawwal)
  •          Al Rajhi Bank
  •          Arab National Bank
  •          Bank Al-Bilad
  •          Bank AlJazira
  •          Asia Bank

Foreign - Licensed Bank in Saudi Market

  •          Qatar National Bank (QNB)
  •          State Bank of India (SBI)
  •          Gulf International Bank (GIB)
  •          Emirates NBD
  •          National Bank of Bahrain (NBB)
  •          National Bank of Kuwait (NBK)
  •          Muscat Bank
  •          Deutsche Bank
  •          BNP Paribas
  •          J.P. Morgan Chase N.A
  •          National Bank of Pakistan (NBP)
  •          T.C.ZIRAAT BANKASI A.S.
  •          Industrial and Commercial Bank of China (ICBC)