Bank Lending to Private Sector Hits Record SAR 2.89 Trillion in 2025

Saudi bank lending to the private sector reached a historic high in January 2025. Bank claims on the private sector surged by nearly 14% year-on-year, reaching SAR 2.89 trillion (USD 770.6 billion), up from SAR 2.54 trillion (USD 676 billion) in January 2024. The bulk of these claims, approximately 96%, comprised bank credit, which grew by 13% annually to SAR 2.79 trillion (USD 744 billion).

Despite robust credit expansion, deposit growth lagged behind lending, increasing by 9.2% year-on-year to SAR 2.73 trillion (USD 728 billion). The gap between deposit accumulation and loan issuance has widened, potentially constraining banks' ability to sustain current lending momentum. Saudi private sector firms have limited access to public financing through bonds or sukuk issuances, making bank loans their primary source of funding. Over the past five years, private sector financing has nearly doubled, reflecting strong credit demand from businesses and individuals.

Saudi Arabia's economy remains less leveraged than other GCC nations, providing room for further credit expansion. The non-oil sector is projected to grow by over 4% in 2025–2026, supporting continued lending activity. Anticipated interest rate cuts could lower borrowing costs, but liquidity constraints within the banking sector may temper their impact. In December 2024, Saudi banks recorded a monthly decline in deposits for the first time in five years, contributing to higher funding costs. A widening funding gap, where loan growth outpaces deposit accumulation, could limit the advantages of lower interest rates for borrowers.