Saudi Arabia drives regional financial shifts via sukuk and private capital

Saudi Arabia is experiencing a structural shift in its financial landscape, characterized by increased reliance on capital markets and a dominant role in regional private-capital fundraising.

Listed Saudi banks have issued SAR 30.75bn ($8.2bn) in sukuk since the start of 2026. This move aims to diversify funding as the traditional deposit-led model shifts; customer deposits as a percentage of net loans have declined significantly from 115.7% in 2016 to 94.6% at the end of 2025. Riyad Bank led the issuance with SAR 10bn, followed by Al Rajhi Bank and Alinma Bank. Much of this issuance involves Additional Tier 1 (AT1) instruments to reinforce regulatory capital.

In the private equity sector, Saudi Arabia accounted for approximately 61% of private-capital funds closed in the Middle East since 2015. According to analysis by BlackRock, the Kingdom hosted 359 of the 590 funds closed in the region during this period, more than doubling the 143 funds recorded in the UAE. The Saudi Public Investment Fund has also accelerated direct private-equity activity, overtaking rest-of-world activity in 2023.