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Bloomberg
A jump in mortgages and a recovery in Saudi Arabia’s economy may help Al Rajhi Bank, the kingdom’s second-biggest lender, reverse a decline in lending.
Overall lending may improve to show “low single-digit†growth this year and increase to match historical levels of expanding in mid-single digits from 2019, Chief Executive Officer Steve Berta mini said in an interview in Dubai. While its loan book contracted 1.7 percent in the 12 months through June, higher government spending and faster economic growth amid higher oil prices should help a revival, he said.
“We’ve seen our share continue to grow in the housing market and the industry as a whole is also expanding,†Bertamini said. Home loans have risen as much as 6 percent this year and there are 450,000 Saudis eligible to purchase a home under one of the government programmes, he said.
Saudi Arabia’s new housing project announced in February includes an 18 billion riyal ($4.8 billion) loan-guarantee programme to boost access to funding and 12.5 billion riyals to support down-payments, all to be spent through 2030. Housing policy is an especially sensitive plank of Crown Prince Mohammed bin Salman’s economic transformation plan as many Saudis say they’re unable to afford homes or obtain financing.
Riyadh-based Al Rajhi, the Middle East’s biggest Islamic bank, in July reported an 18 percent rise in second-quarter profit to 2.57 billion riyals, beating analyst estimates. Saudi Arabia’s economic expansion will accelerate to 1.6 percent this year from 0.9 percent in 2017, according to the median estimate of 14 economists compiled by Bloomberg.