A&M: top Saudi banks show strong growth in operating income

(MENAFN) According to professional services firm Alvarez & Marsal, top Saudi banks exhibited robust performances in 2023, marked by a 9.5 percent growth in operating income. This growth was primarily fueled by non-interest revenue, showcasing the resilience and vitality of the financial sector in the Kingdom of Saudi Arabia.

The findings from A&M's fourth annual Kingdom of Saudi Arabia Banking Pulse report for the 12-month period underscored a thriving financial landscape, characterized by significant upticks in critical metrics.

“The performance of the top 10 banks in the Kingdom is largely robust and positive. Operating income grew by 9.5 percent, reflecting the effect of higher non-interest income,” the company declared in a statement.

The financial institutions analyzed by Alvarez & Marsal in their report included prominent names such as Saudi National Bank, Al-Rajhi Bank, Riyad Bank, Saudi British Bank, Banque Saudi Fransi, Arab National Bank, and Alinma Bank. Additionally, other key players like Bank Albilad, Saudi Investment Bank, and Bank Aljazira were also part of the analysis.

The report highlighted several key findings, including a substantial improvement in the net interest margin by 3.5 percent, which contributed significantly to the sector's overall profitability. This increase was reflected in a higher return on equity, reaching 14.5 percent, indicating the industry's robust financial health.

According to A&M's release, there was a slight decline in the cost of risk, signaling a marginal decrease in total impairments. This decline positively impacted the overall stability of the banking sector.

Furthermore, the report noted a notable enhancement in liquidity, driven by record government-related entity deposits, which constituted 68.2 percent of total inflows. This improvement in liquidity conditions played a significant role in bolstering the resilience of the banking system.

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