Saudi Banks Poised for Strong Lending Momentum in 2026 Backed by Vision 2030

Saudi banks are entering 2026 with solid lending momentum, driven by rising financing needs tied to Vision 2030 mega-projects and continued reliance on external funding to bridge liquidity gaps and support credit expansion.

Corporate lending is expected to be the main beneficiary, with new loans projected to range between $65 billion and $75 billion in 2026, supported by strong investment in real estate, utilities, and infrastructure.

At the same time, retail lending—particularly mortgages—is emerging as an additional growth driver, benefiting from a low interest rate environment.

Mortgages account for nearly half of retail loans, with expectations of around $20 billion in additional lending next year.

Despite robust credit activity, Saudi banks may face mild pressure on profitability due to lower interest rates and higher risk costs, as asset quality indicators normalize.

Government-related deposits remain an important funding pillar, but their growth has not fully matched loan expansion, prompting banks to continue tapping external debt while keeping leverage at manageable levels.

Over the medium term, Saudi banks are expected to maintain strong capitalization and profitability, supported by ongoing digital transformation and the integration of sustainability criteria, despite potential challenges from oil price volatility and geopolitical risks.