Saudi banks see deposit growth outpace lending in Q2 2026

Saudi Arabian banks are entering a more favorable financing position as deposit growth outpaces credit expansion. In the second quarter of 2026, deposits at the ten largest listed banks rose by 2.7 percent, while net loans and advances increased by 1.8 percent, according to an Alvarez & Marsal report. This shift has helped strengthen liquidity and lower the sector’s loan-to-deposit ratio to 103.1 percent.

Aggregate operating income for these banks rose 5.1 percent to SR42.5 billion ($11.3 billion). The sector has also seen improvements in efficiency, with the cost-to-income ratio dropping to 28.6 percent from 30.1 percent in the previous quarter. Analysts suggest that banks are becoming more selective in lending, focusing on high-quality corporate clients to improve loan pricing and margins.

Data from the Saudi Central Bank (SAMA) indicates that total credit reached approximately SR3.42 trillion by the end of June 2026, a 7.3 percent annual increase, while deposits grew by 8.9 percent to roughly SR3.13 trillion. This trend is expected to support improved operating margins and revenues through the second half of 2026.