Saudi central bank may raise loan-deposit ratio to help economy

Published: Updated:
Read Mode
100% Font Size
1 min read

Saudi Arabia’s central bank governor Ahmed al-Kholifey told Al Arabiya that the maximum loan-to-deposit ratio for commercial banks may be raised if that is needed to help the economy.

The ratio for the banking sector as a whole stood at 81.7 percent in August, down from 84.8 percent a year ago, according to the latest central bank data.

The central bank last raised the ratio in February 2016, to 90 percent from 85 percent. Kholifey was speaking on the sidelines of meetings of the International Monetary Fund and the World Bank in Washington at the weekend.

Kholifey also noted that the non-oil sector of the economy grew 0.6 percent from a year earlier in the first half of this year, which he said suggested the non-oil sector would lead economic expansion. Saudi banks have passed stress tests and are not worried about bad loans, he added.

Earlier this year, Alawwal Bank entered talks to merge with Saudi British Bank, partly owned by HSBC . Kholifey said that the situation with the possible merger would be clear by the end of this year.

He also said two regional banks and one Asian bank were in advanced stages of procedures to obtain Saudi banking licences. He did not name the institutions.

Top Content Trending