RIYADH: Saudi banks’ total outstanding loans reached SR3.17 trillion ($844.7 billion) at the end of May, an annual increase of 16.28 percent, according to the latest official data.
Figures released by the Saudi Central Bank, also known as SAMA, show that this marks one of the fastest annual credit expansions in recent years, underscoring strong economic momentum in the Kingdom.
The SAMA data revealed that business loans now comprise 55.35 percent of all bank credit, up from 52.87 percent a year ago.
Corporate lending surged 21.73 percent year on year to SR1.75 trillion, far outpacing personal lending, which rose around 10 percent to SR1.41 trillion.
This shift highlights how companies have become the dominant force in ’s lending landscape, as banks pivot from consumer finance to funding large projects and enterprises.
The Kingdom’s credit boom stands out within the region. Across the Gulf Cooperation Council countries, most banking sectors are expanding on the back of post-pandemic economic growth and government spending, but Saudi banks are leading the pack in loan growth.
A Kamco Invest report published in May found the Kingdom posted the region’s highest year-on-year loan growth in the first quarter of 2025, outpacing other Gulf markets.
This growth was broad-based across sectors — including construction, real estate, education, and transport — whereas some neighboring countries saw more subdued or narrowly focused increases.
The UAE, the region’s second-largest banking market, is also seeing solid credit expansion supported by its own infrastructure and economic reforms.
Gulf banks in general benefit from strong capitalization and government backing, which has kept credit flowing. The International Monetary Fund projects GCC economies to grow around 3.5 percent in 2025, with , the UAE, and Qatar driving non-oil growth.
This trend aligns with the Kingdom’s Vision 2030 diversification plan, which emphasizes infrastructure, industry, and non-oil sectors. It also indicates that after a decade of mortgage-fueled expansion, banks are rebalancing portfolios toward commercial lending in response to market demand and government priorities.
This “structural hand-off” means business lending is now the engine of Saudi banking — a significant change after years when consumer mortgages dominated credit creation.
Real estate dominates; education and transport soar
Within corporate lending, real estate developers remain the single largest borrower group according to SAMA data. Real estate activities accounted for 21.35 percent of outstanding corporate credit, totaling approximately SR374 billion in May.
This segment grew by a remarkable 37.7 percent annually, reflecting heightened demand for housing, commercial infrastructure, and mega-project development across the Kingdom.
’s ambitious construction boom — from new housing in major cities to giga-projects like NEOM, the Red Sea tourism resorts, and large mixed-use developments — has driven banks to significantly increase financing for land purchases, building, and property development.
According to a March report by real estate consultancy JLL, ’s real estate sector is set for sustained growth, driven by Vision 2030 diversification goals and robust non-oil economic expansion.
The construction sector recorded $29.5 billion in project awards in 2024, while the property market is forecast by the Real Estate General Authority to reach $101.6 billion by 2029, growing at a compound annual rate of 8 percent.
Grade-A office demand in Riyadh surged, with vacancy falling to just 0.2 percent by the end of 2024 and average rents reaching $609 per sq. meter.
JLL noted that 326,000 sq. meters of leasable space was delivered in 2024, with an additional 888,600 sq. meters in the pipeline for 2025. The firm added that Jeddah is emerging as a competitive alternative, attracting regional and international firms, while rising office and logistics rents in both Riyadh and Jeddah indicate strong commercial demand.
The report also highlighted real estate tailwinds from upcoming mega-events like the 2030 FIFA World Cup and Expo 2030, which are expected to inject significant capital and further boost infrastructure development across the Kingdom.
Other major sectors in banks’ corporate portfolios include wholesale and retail trade, around 12.2 percent of corporate credit, utilities like electricity, water and gas of 11 percent, and manufacturing at 11 percent.
Each of these recorded healthy double-digit growth, supported by increased public and private investment and industrial reforms.
This includes lending to the utilities sector growing to SR196 billion, as expands power grids, renewable energy projects, and water infrastructure to meet rising demand.
Manufacturing loans — about SR191 billion — reflect ongoing expansion in petrochemicals, metals, and consumer goods production under diversification initiatives.
Crucially, some of the fastest growth rates were seen in smaller, emerging segments, highlighting shifting priorities.
Education sector credit, though making up only 0.55 percent of corporate loans, jumped by over 48 percent year on year to around SR9.58 billion.
This was the highest growth of any sector, fueled by a national drive to expand and modernize educational institutions. is encouraging more private investment in schools, universities, and training centers as part of Vision 2030’s human capital development goals.
Transport and logistics is another booming area. Loans for transportation and storage climbed 43 percent year on year, reaching SR68 billion.
This reflects ’s push to become a global logistics hub, building new ports, airports, railways, and warehouses. Huge projects such as the expansion of Riyadh’s King Salman International Airport and the launch of a new national airline, as well as improvements in roads and shipping infrastructure, require significant funding.
The government’s National Transport and Logistics Strategy envisions $150 billion of investments in transport infrastructure by 2030, with 80 percent of these coming from the private sector via public-private partnerships and privatizations in airports and roadways.
Banks are playing a key role by lending to contractors and logistics firms involved in these ventures. The result is that transport and logistics finance has seen one of the sharpest upticks across all industries, second only to education in growth rate.
Going forward, Saudi lenders are expected to maintain a delicate balance, financing aggressive growth in the corporate sector while guarding against liquidity and risk pressures.
