Riyadh: More Saudis took advantage of personal finance loans in the first three months of 2022, which could boost retail spending as the kingdom continues to recover from the aftermath of the pandemic.
According to the latest data from the Saudi Central Bank, total loans provided by Saudi Arabian Finance Corporation rose 4.4% to 71.1 billion riyals ($18.96 billion) at the end of the first quarter of 2022 from 68.2 billion riyals in the previous quarter.
Growth was mainly from personal finance loans, which increased by 1.8 billion riyals at the end of the first quarter to 16.3 billion rials. In addition, 500 million riyals have been added, which the bank classifies as “other” loans.
Central bank data further showed that real estate loans rose 1.3% to 26 billion riyals in the first quarter compared to the fourth quarter of 2021. Of this, retail loans accounted for 85.4% at the end of the first quarter, compared to just 14.6% of corporate real estate loans.
Compared to the fourth quarter of 2021, corporate real estate loan growth was 4.74%, while retail loan growth was 0.72%.
Total non-retail lending by finance companies rose by 3.9% at the end of the first quarter to a total of 17.5 billion riyals. During the same period, retail loans rose 4.5% to 53.6 billion riyals. Compared with the same period last year, retail loans of financial companies increased by 22% from 43.9 billion riyals.
Looking at the breakdown of non-retail loans by the borrower sector, the construction sector accounted for the highest share at 23%, with a total of around 4 billion riyals in the first quarter.
The commercial sector came in second with a 21.5% share, followed by the services sector with a 15.5% share in the first quarter.
Among non-retail borrowers by size, MSMEs have a combined share of 87%, with the remainder contributed by other non-SMEs.
At the end of the first quarter of 2022, Saudi Finance Corporation and Real Estate Refinancing Corporation had total assets of 70.3 billion riyals ($18.75 billion).
These results include Saudi Refinancing Corporation, which contributed nearly a quarter of the total.
Finance company assets increased 5% from the end of the previous quarter and 20.7% from the same period in 2021. As of the end of the first quarter, non-real estate finance company assets accounted for about 55% of total assets, while companies specializing in real estate finance accounted for about 21%.
Net income generated by all financial companies increased from 103 million riyals in the previous quarter to 893 million rials in the first quarter of 2022. This means that net income increased nearly 39 times sequentially.
The surge was mainly due to an increase in the net income of non-real estate financial companies from 19 million riyals in the fourth quarter of last year to 776 million rials in the first quarter of 2022.
Data provided by the central bank did not specify the Saudi refinancing company’s share. However, the company’s asset growth is particularly prominent compared to other groups.
Compared with the first quarter of 2021, the net income of non-real estate financial companies almost doubled to 539 million riyals, an increase of 98% from 271 million rials in the fourth quarter of 2020.
.