Saudi Banks Enter 2026 With Strong Lending Momentum Backed by Vision 2030

Saudi banks are entering 2026 with strong lending momentum, supported by rising financing needs linked to Vision 2030 mega-projects and solid economic activity across both oil and non-oil sectors.

Corporate lending is expected to remain the main growth driver, with new loans projected to range between $65 billion and $75 billion in 2026, fueled by heavy investment in real estate, utilities, and infrastructure.

At the same time, retail lending—particularly mortgages—is emerging as an additional growth avenue, 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 expansion, Saudi banks continue to rely more on external funding to bridge liquidity gaps, as deposit growth has not fully kept pace with loan expansion, pushing loan-to-deposit ratios higher.

Asset quality indicators are expected to normalize, with a modest rise in non-performing loans and risk costs due to greater exposure to higher-risk segments and reduced write-offs.

Overall profitability across Saudi banks is set to remain solid, despite some pressure from lower interest rates, supported by ongoing investments in digital transformation to enhance operational efficiency and ensure sustainable growth.