Saudi Arabia Banking Pulse

FOREWORD Alvarez & Marsal Middle East Limited (A&M) is delighted to publish the Q3'21 edition of the Kingdom of Saudi Arabia (KSA) Banking Pulse ("The Pulse"). In this quarterly series, we share results from our research examining the top ten largest listed KSA banks by assets, and highlight key performance indicators of the KSA banking industry. The Pulse aims to help banking executives and board members stay current on industry trends. L&A and deposits of top KSA banks increased by 2.8% and 1.2% QoQ, respectively. Operating income increased by 2.9% QoQ while the overall efficiency for the banking sector remained stable during the quarter, as witnessed by a marginal increase in cost-to-income ratio by ~6bps in Q3'21. Cost of risk decreased by ~50bps, largely due to lower provisioning by banks. Asset quality improved as NPL/Net Loan ratio decreased from 1.8% in Q2'21 to 1.7% in Q3'21, whereas coverage ratio increased to 158%. The Saudi Arabian economy is expected to recover strongly in 2021-2022 with IMF forecasting GDP growth of 2.8% (2021) and 4.8% (2022), driven by recovery in global demand for oil, easing of pandemic curbs and oil producers' agreement to boost output. Digitalization of the banking sector along with government reforms is expected to provide growth opportunities for the banks. We hope that you will find our latest edition of the KSA Banking Pulse useful and informative. 2 M Disclaimer: The information contained in this document is of a general nature and has been obtained from publicly available information plus market insights. The information is not intended to address the specific circumstances of an individual or institution. There is no guarantee that the information is accurate at the date received by the recipient or that it will be accurate in the future. All parties should seek appropriate professional advice to analyze their particular situation before acting on any of the information contained herein

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