Saudi banks listed on the stock exchange are heading to achieve the highest profits in their history this year, after recording record levels during the first three quarters of this year.
The ten Saudi banks listed on the stock exchange achieved profits of 46.29 billion riyals (12.32 billion dollars), during the past 9 months, with a growth of 26.1% on an annual basis.
And according to the Saudi “Al-Sharq” channel, today, Wednesday, the profits for the third quarter of this year amounted to 16.5 billion riyals ($4.40 billion), with a growth of 23% on an annual basis.
During the first and second quarters, banks also achieved record profits, but their profits during the third quarter were the highest ever.
If Saudi banks continue at their level of growth during the current year, their combined profits may reach 61.9 billion riyals ($16.5 billion) during 2022.
The profit growth during the third quarter is partly due to the increase in banks' net income from financing and investment commissions by 15% during the third quarter of this year on an annual basis.
Profits grew, supported by the growth of SIBOR prices (the indicative price for borrowing between Saudi banks as it is used to price many loans provided by banks to companies and institutions) among Saudi banks, which rose by about 230 basis points on an annual basis.
The Saudi Central Bank raised interest rates by 150 basis points during the third quarter of this year, following the path of the US Federal Reserve, which is tightening its monetary policy to combat inflation.
Interest rates in Saudi Arabia have increased three times this year, from 1% to 3.75% for purchase deals, and from 0.5% to 3.25% for reverse repurchases.
Saudi banks have benefited from raising interest rates in the United States, especially that the loan portfolio has good assets because a large percentage of it is for the "private sector".
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