Saudi banks posted a strong profit increase in July 2025, with total earnings before zakat and tax reaching $2.2 billion. This marks a 7 percent rise from the same month last year and boosts the sector’s growth amid Saudi Arabia’s economic push.
Robust Monthly Results Lift Sector
Latest figures show Saudi banks earned SR8.24 billion in July alone. This performance comes from the Saudi Central Bank data and highlights steady progress in the banking industry.
Banks have seen profits climb due to smart lending and higher demand for loans. The monthly gain pushed the year’s total profits from January to July up to SR59.24 billion. That is an 18 percent jump over the first seven months of 2024.
This growth fits into a bigger picture for Gulf banks. Across the region, earnings hit record levels in recent quarters. Experts point to strong revenue and efficient operations as key factors.
Ties to Vision 2030 Drive Lending Surge
Saudi Arabia’s Vision 2030 plan plays a big role in this profit story. The plan aims to diversify the economy away from oil and boost sectors like tourism, tech, and infrastructure.
Banks are funding these changes through more loans to businesses. Total bank credit reached SR3.2 trillion in July, up 15 percent from last year. Corporate loans grew even faster at 22.5 percent to SR1.8 trillion.
This lending supports massive projects like NEOM and other giga-developments. It also helps small businesses and housing efforts, which tie directly to Vision 2030 goals.
- Corporate lending now makes up over 56 percent of all loans, up from 53 percent a year ago.
- Real estate loans have surged due to homeownership programs aiming for 70 percent by 2030.
- Manufacturing and trade sectors saw double-digit loan growth, fueling job creation.
Regional Strength and High Loan Ratios
Saudi banks stand out in the Gulf with a high loan-to-deposit ratio of 94.3 percent. This shows credit demand is outpacing deposits, a sign of active economic activity.
In comparison, Gulf Cooperation Council banks reported $16.2 billion in net profits for the second quarter of 2025. That is a 9 percent yearly increase. Saudi lenders contribute heavily to this regional success.
High interest rates have helped too. Global rates stayed elevated into 2025, allowing banks to earn more on loans. Yet, they managed costs well, keeping operations lean.
| Key Banking Metrics | July 2025 Value | Year-on-Year Change |
|---|---|---|
| Total Profits (Before Zakat and Tax) | $2.2 Billion | +7% |
| Cumulative Profits (Jan-Jul) | SR59.24 Billion | +18% |
| Total Outstanding Credit | SR3.2 Trillion | +15% |
| Corporate Loans | SR1.8 Trillion | +22.5% |
| Loan-to-Deposit Ratio | 94.3% | N/A |
Sector-Specific Loan Growth Trends
Different industries in Saudi Arabia are borrowing more to expand. Trade and utilities saw healthy increases in loans, reflecting broader economic shifts.
Manufacturing loans rose sharply, supporting factories and exports. Other areas like services and construction also grew, aligned with national development plans.
This varied lending shows banks are not just focusing on one sector. It spreads risk and supports balanced growth across the economy.
Experts note that private sector credit jumped 17.7 percent. Digital payments hit 79 percent of retail transactions, making banking more efficient.
Challenges Amid High Interest Rates
High global interest rates pose some hurdles. The US Federal Reserve made small cuts in late 2024, but rates remain high into 2025. This affects borrowing costs for businesses and consumers.
Despite this, Saudi banks have kept non-performing loans low. Asset quality improved even as lending expanded rapidly.
Looking ahead, economists predict continued growth. A poll suggests 61 percent expect rates to ease soon, which could spur even more lending.
Future Outlook for Saudi Banking
The banking sector looks set for more gains as Vision 2030 advances. With liquidity growing 8.4 percent to $826 billion in July, banks have room to lend more.
Industrial production also rose 6.5 percent that month, signaling a strong economy that needs financing.
Overall, these profits reflect a thriving sector ready to support Saudi Arabia’s ambitions. Readers, share your thoughts on how this impacts the economy. What do you see for banking in the coming months? Comment below and spread the word.
