Latest news with #IbrahimAl-Alwan
Arab News
06-02-2025
- Business
- Arab News
Saudi bank lending hits record $788bn as corporate loans surge
RIYADH: Saudi Arabia's bank loans surged to SR2.96 trillion ($788 billion) in December, marking a 14.39 percent year-on-year increase, according to official data. Figures from the Saudi Central Bank, also known as SAMA, revealed that corporate loans were the main driver, rising 18.6 percent to SR1.6 trillion. This marks the highest annual growth for corporate loans among the lending activity data available in SAMA's reporting since 2021. Real estate activities dominated corporate lending, accounting for 21 percent of the total and rising by 33 percent to SR333.34 billion. This marks an increase from an 18.7 percent share in the same period last year. Wholesale and retail trade accounted for 12.51 percent of corporate lending, reaching SR198.87 billion with an annual growth rate of 10.94 percent. The manufacturing sector, a key component of Vision 2030's economic diversification goals, represented an 11.51 percent share at SR182.95 billion. Electricity, gas, and water supplies contributed 11.51 percent to the total corporate share, growing significantly by nearly 29.12 percent to reach SR182.94 billion. Professional, scientific, and technical activities, though holding a smaller 0.51 percent share of corporate credit, witnessed the most significant surge, with a 40.76 percent annual growth rate to SR8.12 billion. Financial and insurance activities loans followed real estate with the third-highest growth rate, increasing by 31 percent to SR136.6 billion. On the personal loans side, which includes various financing options for individuals, the sector grew 9.87 percent annually to SR1.37 trillion. This expansion underscores the continued confidence in consumer lending and the Kingdom's economic diversification strategies. Saudi banks are significantly increasing their lending to the real estate sector, driven by strong demand, regulatory backing, and growing opportunities for public-private partnerships and foreign investment. This expansion is occurring alongside a shift in monetary policy as interest rates begin to decline in line with the US Federal Reserve's approach, creating a more favorable lending environment. Industry experts at the Real Estate Future Forum highlighted the importance of real estate financing for financial institutions, with Ibrahim Al-Alwan, managing director and partner at Watheeq Financial Services, emphasizing that banks now hold substantial real estate portfolios, requiring effective regulation, risk management, and investment tools to optimize growth. Structured financing solutions, such as securitization and real estate investment funds, also play a key role in attracting institutional and foreign investors. Joe Jabbour, managing director and partner at Boston Consulting Group, highlighted that many investment structures currently in development are designed with foreign investors in mind, reflecting the sector's international appeal. The recent decision by Saudi Arabia's Capital Market Authority to allow foreign investment in listed firms that own real estate in Makkah and Madinah further underscores efforts to expand capital inflows into the sector. At the same time, major projects are reshaping the Kingdom's real estate market, with the Public Investment Fund spearheading nine developments in the Asir region, four of which are already underway. The region is also seeing rapid growth in hospitality infrastructure, with thousands of approved hotel rooms under development. As Saudi Arabia advances its Vision 2030 agenda, innovations such as AI-driven property solutions and 3D-printed construction are expected to further transform the sector. The loan-to-deposit ratio in Saudi banks increased to 83.24 percent in December compared to 80.7 percent in the same period last year, according to SAMA data. The LDR is a key indicator used by banks to measure the proportion of loans granted compared to the deposits they hold. In this case, even though the demand for loans has increased at a faster pace than deposit growth, the ratio has stayed below the regulatory limit of 90 percent.
Arab News
28-01-2025
- Business
- Arab News
Experts highlight real estate financing, foreign investment at Saudi forum
RIYADH: Experts at the Real Estate Future Forum emphasized the evolving landscape of property financing in Saudi Arabia, pointing to strong bank portfolios, public-private partnership opportunities, and a focus on foreign investment. The Managing Director and Partner at Watheeq Financial Services, Ibrahim Al-Alwan, highlighted the rising significance of property financing for financial institutions: 'Today, we see that banks' portfolios in real estate financing are very high. The process involves regulation, management, and the implementation of effective tools for investment and financing.' Joe Jabbour, managing director and partner at Boston Consulting Group, underlined the vast potential for PPPs, particularly in utilities, social, and civil infrastructure, facilitated by government offtake agreements. 'I must say that most of the investments that are being structured and are being prepared for the market, have the foreign investors in mind,' Jabbour said. On its second day, the forum explores the key trends shaping Saudi Arabia's real estate sector as it advances toward Vision 2030 goals. The inaugural day included industry leaders, policymakers, and investors who discussed the Kingdom's ongoing focus on property development, investment strategies, and tourism expansion. Governor of Asir Region Prince Turki Bin Talal said during a panel that the Public Investment Fund has nine projects in development, with four already launched and five underway in the region. The governor also said that Asir has between 6,000 and 8,000 approved and licensed hotel rooms. In line with this momentum, he also announced that the Ministry of Sports has officially recognized Abha's World Cup bid as the best in the Kingdom. A key highlight from the first day was the Capital Market Authority's announcement permitting foreign investment in Saudi-listed companies that own real estate in Makkah and Madinah. 'On behalf of the CMA, we congratulate these companies,' CMA's Chairman Mohammed El-Kuwaiz said. The Real Estate Future Forum, taking place from Jan. 27 to 29 at the Four Seasons Hotel in Riyadh, serves as a global platform for shaping the industry's future. Uniting over 300 speakers from 85 countries, the event explores innovations, sustainability initiatives, and investment strategies under the theme 'Future for Humanity: Shaping Dreams into Reality.' The upcoming event days are set to provide an outlook on integrating advanced technologies into the real estate sector, with panels diving into emerging trends like virtual reality for property marketing, the role of the metaverse in digital real estate, and the use of robotics and 3D printing in construction.
