Saudi Bank Credit Reached SAR3.42 Trillion. Deposits Are Growing Faster — For Now

Last verified: 1 September 2026. Saudi banks ended June 2026 with SAR3.419 trillion of credit and SAR3.132 trillion of deposits. Credit was 7.3 per cent higher than a year earlier; deposits grew 8.9 per cent. Broad money rose 8.4 per cent to SAR3.38 trillion. [S1]

For the first time in the current funding discussion, the annual deposit growth rate was comfortably ahead of lending. A simple division of total credit by total deposits gives 109.2 per cent in June, down from approximately 110.8 per cent a year earlier. The gap between the two stocks was SAR287 billion, against roughly SAR310 billion in June 2025.

That is a genuine easing of the marginal funding squeeze. It is not proof that Saudi banks have abundant cheap liquidity for every Vision 2030 project.

*Calculated from headline SAMA stocks. It is not SAMA’s regulatory loan-to-deposit ratio, which uses supervisory definitions and adjustments.

The June snapshot says the immediate pressure stopped intensifying. The five-year prudential record says the structural funding question remains open.

The ratio improved, but the long trend ran the other way

IMF financial-soundness data show customer deposits equal to 115.7 per cent of net loans in 2016, 109.7 per cent in 2021, 101.5 per cent in 2023, 96.1 per cent in 2024 and 94.6 per cent in 2025. [S2] Inverse that ratio and net loans increasingly exceeded customer deposits.

The IMF’s 2025 assessment described strong credit growth—particularly corporate lending and mortgages—as a source of funding pressure. Banks responded with bonds, bilateral and syndicated loans and certificates of deposit; external borrowing pushed the sector’s net foreign assets negative in 2024 for the first time since 1993. [S3]

June 2026 therefore needs to persist before it changes the structural verdict. One month cannot show whether deposit mobilisation has caught up with the capex cycle or whether a temporary inflow has merely narrowed the gap.

There are three different ratios that should not be collapsed into one:

• The 109.2-per-cent figure above divides gross headline bank credit by all deposits and is useful only as a transparent directional indicator.
• The IMF’s customer-deposits-to-net-loans series uses net loans and therefore gives a different number and inverse orientation.
• SAMA’s regulatory loan-to-deposit calculation can recognise eligible long-term funding and supervisory adjustments; only the bank-level regulatory return establishes formal compliance.

A headline ratio above 100 per cent is not itself evidence of a breach or a bank run. It means assets beyond the deposit base must be funded by capital, interbank liabilities, wholesale debt, foreign borrowing or other sources.

Deposit quantity improved; deposit price probably did not

The composition of deposits changed sharply. Time and savings deposits rose 25 per cent year on year to SAR1.375 trillion, while demand deposits fell 3.2 per cent to SAR1.447 trillion. [S1]

Demand balances are usually the banking system’s cheapest funding. Time deposits pay customers for committing funds. Moving from the former to the latter can improve tenor and stability while raising interest expense.

SAMA’s 2025 Financial Stability Report had already documented the transition: demand deposits fell to 53.5 per cent of deposits in 2024 from 66.0 per cent in 2020. It described the broader funding structure as more stable but recorded a fall in the average liquidity coverage ratio to 155.2 per cent from 178.0 per cent. That remained well above the 100-per-cent minimum, but the direction mattered. [S4]

The apparent trade is rational. A bank can pay more for longer-duration deposits to reduce withdrawal risk and match long-lived loans. The cost then appears in net interest margin or is passed to borrowers. Deposit growth can solve a funding-volume problem while creating a funding-cost problem.

Broad money adds another useful boundary. M3 at SAR3.38 trillion exceeded deposits because it includes currency outside banks and defined quasi-money components. It is a macro-liquidity aggregate, not a pool that banks can lend one-for-one.

The maturity mix is becoming more demanding

Long-term credit reached SAR1.64 trillion in June—48 per cent of total credit. Short-term lending was SAR1.31 trillion, 38 per cent; medium-term was SAR475 billion, 14 per cent. [S1]

The fastest annual increase came from short-term credit, which rose about SAR170 billion. That may include working capital and trade finance that self-liquidates faster than a project loan. Long-term credit increased by approximately SAR80 billion. Medium-term credit fell SAR15 billion.

This mix is less alarming than a SAR233-billion increase driven entirely by 20-year assets. It does not remove asset-liability mismatch. Vision 2030 projects often require construction-period facilities, guarantees, bridge loans and eventual refinancing. Even when a project company is the borrower, commercial banks supply working capital to contractors and suppliers around it.

The 2025 prudential data show where concentration was rising. Property and construction loans increased from 12.6 per cent of total loans in 2021 to 16.2 per cent in 2025. Manufacturing’s share fell from 8.3 per cent to 5.9 per cent. Foreign-currency-denominated loans rose to 11.0 per cent of total loans, from 9.4 per cent in 2024. [S2]

Those are sector-level signals, not evidence that any project is distressed. They tell supervisors where correlated shocks, construction delays, refinancing needs or currency funding can accumulate.

Consumer credit is large; corporate claims drove the policy question

Loans to individuals were reported at approximately SAR1.45 trillion in June, 42.6 per cent of total credit and 4 per cent higher year on year. [S5] SAMA’s separate claims measure put claims on the private sector at SAR3.27 trillion, up 6.8 per cent, and public-sector claims at SAR930.1 billion, up 7.8 per cent. [S1]

These classifications should not be added to the SAR3.419-trillion credit total: SAMA’s balance-sheet “claims” series includes instruments and counterparties on a different statistical basis. They are useful for direction, not a plug-and-play sector decomposition.

The funding policy question is nonetheless clear. Mortgages, corporate facilities, project finance and public-sector exposures can all extend asset duration. The banks need deposits and wholesale liabilities that remain available through construction and operating ramps, not just during a quarter of high oil receipts.

Countercase: the system has substantial buffers

A funding squeeze is not a solvency crisis. At end-2025, the banking system’s total capital ratio was 20.5 per cent, Tier 1 ratio 18.8 per cent and gross non-performing-loan ratio 1.0 per cent—the lowest in the IMF’s decade series. Liquid assets were 20.2 per cent of total assets and 38.0 per cent of short-term liabilities. [S2]

The IMF’s July 2026 Executive Board assessment explicitly welcomed strong capital and liquidity buffers and SAMA’s liquidity management. It also urged continued monitoring of foreign-exchange funding, sovereign-bank linkages and exposure to large projects. [S6]

That is the balanced conclusion. Saudi banks entered 2026 profitable, well capitalised and with low reported defaults. They can use capital markets and external borrowing to supplement deposits. Wholesale funding also carries refinancing, market-price and currency-liquidity risks that sticky domestic deposits do not.

What would falsify this assessment

The “easing, not solved” thesis would be too cautious if deposit growth continues above credit growth for several quarters, demand deposits stabilise, net foreign liabilities fall and bank-level liquidity ratios rise without margin compression. It would be too optimistic if credit reaccelerates into double digits, the mechanical credit/deposit ratio rises, external borrowing expands rapidly or project restructurings push non-performing loans upward.

The most useful monthly dashboard is small: credit and deposits by growth rate; demand versus time deposits; simple and regulatory funding ratios; net foreign assets; SAIBOR–SOFR spreads; long-term-loan share; property-and-construction concentration; LCR/NSFR; and NPL migration.

June’s numbers are favourable because the deposit denominator finally moved faster. The harder Vision 2030 test is whether that performance survives another acceleration in project awards. A banking system can finance transformation with credit, but only if funding duration, cost and concentration transform with it.

Related Vision 2030 Context

• PIF’s 2025 accounts separate profit from comprehensive loss
• Saudi trade recorded a national surplus even as non-oil exports changed
• Saudi Arabia’s derivatives activation still needs durable open interest

Sources

1. [S1] Saudi Central Bank, Monthly Statistical Bulletin, June 2026; headline credit, maturity, deposit and money-supply data as reproduced with series values by Arab News. SAMA monthly statistics; data summary
2. [S2] International Monetary Fund, Saudi Arabia: 2026 Article IV Consultation, Staff Report, Table 5 and banking-sector discussion, July 2026. IMF country report
3. [S3] International Monetary Fund, Saudi Arabia: Concluding Statement of the 2025 Article IV Mission, 25 June 2025. IMF concluding statement
4. [S4] Saudi Central Bank, Financial Stability Report 2025, banking funding and liquidity chapters. SAMA Financial Stability Report
5. [S5] Al Madina, “SAR3.4 Trillion in Bank Credit, Up 7%,” 2 August 2026, citing SAMA’s June bulletin. Al Madina data summary
6. [S6] International Monetary Fund, “Executive Board Concludes 2026 Article IV Consultation with Saudi Arabia,” 29 July 2026. IMF Executive Board statement