RIYADH: Saudi Arabian banks reported the Gulf’s biggest increase in net loans in the second quarter while return on equity surged for the Kingdom’s lenders as the region’s economy continued its rebound from the coronavirus pandemic.
Saudi lenders increased their loan books by a net 13.1 percent from the previous three months, the most of any country in the GCC, Kuwait-based asset manager Kamco Invest said in a report. Average return on equity, a measure of profitability, was 11.0 percent for the Kingdom’s banks, second in the region after Qatar, and above the average of 9.1 percent.
Faster economic activity was evident in the purchasing managers’ indices for UAE and Saudi Arabia that remained elevated during May 2021 and June 2021, well above the growth mark of 50, the report said.
On the policy front “several targeted government programs … to support vulnerable sectors” were extended, in Saudi Arabia and Kuwait giving the banking sector some short-term certainty.