Saudi banks opt for short term loans
RIYADH: Saudi Arabia's banks have stepped up short term lending at the expense of major loans in the medium and long run and a large part of their credit activity involves individuals, the Gulf Kingdom's largest bank said on Wednesday.
In a study sent to Emirates 24/7, the Bank said the components of credit involved real estate finance, cars and equipment, and miscellaneous loans defined as 'Other'. The Real Estate category, accounting for 10.6 per cent of the total, witnessed the largest expansion of 28.2 per cent to SR 22 billion in the third quarter, reflecting a surge in demand on rising prices, it said.
With a yearly market demand in excess of SR60 billion, consumer credit for automobiles and equipments together grew 7.4 per cent to SR41.5 billion while other consumer loans increased by 7.7 per cent to SR134.3 billion, with the share of the latter in total loan portfolio growing to 67.9 per cent in the third quarter, suggesting expanding trade and related sectors. -PB News