Saudi Arabia Banking Pulse
7 KSA banking sector: Extension of loan deferral program to
continue providing cushion to banks
Improved
Stable
Worsened
Return on Equity* (%)
Op. Income / Assets (%)
Non-Interest Income /
Op. Income (%)
Yield On Credit (%)
3.9
3.9
3.9 3.9
3.7
22.3
Q3'20
23.9
24.9
Q4'20
23.1
22.6
Q1'21
Q2'21
Q3'21
5.4
5.3
5.2
5.1
5.0
Q3'20
Q4'20
Q1'21
Q2'21
Assets/Equity (x)
6.9 6.8 6.8
6.4
6.3
Cost / Income Ratio (%)
Net Interest Margin (%)
Cost of Funds (%)
35.7
35.2
35.1 35.2
3.2 3.1 3.0 3.1
0.5
3.0
12.8
13.5
10.4
11.1 12.0
Return on Assets (%)
1.8
1.9
1.8
1.6
1.5
Q3'20
33.5
Q3'20
Q4'20
Q1'21
Q2'21
Q3'21
Q3'20
Q3'21
0.4 0.4 0.4 0.4
Q4'20
Q1'21
Q2'21
Q3'21
KEY TAKEAWAYS
• Aggregate RoE improved in Q3'21 to
12.0% from 11.1% in the previous
quarter
• SAMA has extended the loan deferral
program till the end of 2021
■ The outlook for cost of risk remains
negative despite an extension of the
loan deferral program, due to the
possibility of increase in bad loans
• Saudi Central Bank has already pushed
for a move towards digital banking
• Saudi Central Bank has announced the
launch of the country's open banking
framework, a step taken to diversify its
financial service sectors, expected to
go live in 2022
Note: All the charts above are based on L3M numbers
Op Income stands for Operating Income
Scaling and some numbers might not add up due to rounding
Source: Financial statements, Investor presentations, A&M analysis
0.8
Cost of Risk (%)
1.3
Q3'20
Q4'20
Q1'21
0.6
1.0
0.5
Q2'21
Q3'21
18
88.1
Q3'20
Q4'20
LDR (%)
87.2
89.7 90.0
91.5
Q1'21
Q2'21
Q3'21
ALVAREZ & MARSALView entire presentation