Saudi banks 'to start lending more in 2010'
Jeddah, February 27, 2010
Banks in Saudi Arabia are expected to lend more in 2010 as confidence is growing and lenders become less risk averse, the chief economist of state-owned National Commercial Bank said on Saturday.
'For this year we will see a faster growth of lending compared to last year but it will be gradual,' Said al-Shaikh told reporters in Jeddah.
Bank credit in the kingdom stood at SR736.9 billion ($196.5 billion) at the end of last year, down from SR744.8 billion at end-2008 as the global crisis and concern over the debt of Saudi family firms weighed.
'Banks will become less risk averse than last year and also the appetite for lending will be resumed and all the projects that were delayed and all the expansion plans that were put on hold will be coming back,' Shaikh said.
The performance of banks, which showed weak results last year due to increased provisions, is expected to improve in 2010 as some of the lenders have taken more provisions than they needed, Shaikh said.
'I expect some of these provisions to come back as profits it could be in 2010, it could be in 2011.'-Reuters