With declining interest rates and improving activity … the private sector is expanding its long-term borrowing for the seventh month

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Long-term bank credit provided to the private sector and public institutions in Saudi Arabia registered a growth of 30.6 percent at the end of November of 2020, on an annual basis, reaching about 785.15 billion riyals, an increase of 183.8 billion riyals.
According to the monitoring unit of the reports in Al-Eqtisadiah newspaper, based on data from the Central Bank of Saudi Arabia, “SAMA”, the long-term loans recorded in November (November) a monthly growth of 2.7 percent, the highest in three months, with an increase of 20.7 billion Rial.
The long-term lending operations provided by the banking sector continued to grow for the seventh month in a row, coinciding with the decline in interest rates and the return of private sector activity during the period.
It is noticeable that the growth rates of long-term and medium-term loans continued during the past months, which coincided with the acceleration of the decline in interest rates for loans, as the average interest rates among banks “SIBOR” fell by 62.5 percent during the past 12 months until November 2020 .
By following up on the companies listed on the local stock market, there are a number of companies that took advantage of the decline in interest rates, either with new lending or restructuring of previous loans.
Long-term loans accounted for 44 percent of total bank loans by the end of November 2020, amounting to 1.77 trillion riyals, while it was estimated at 39 percent of total loans for the same period of 2019.
Whereas, medium-term loans accounted for about 14.7 percent by the end of November 2020, reaching about 260.41 billion riyals after recording an annual growth of 12.4 percent, while short-term loans accounted for 41.1 percent of total loans, about 728.19 billion riyals. It grew by 4.2 percent during the period.

Economic Reports Unit





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