The Kingdom of Saudi Arabia is considering issuing two new digital banking licences and is currently in the process of reviewing two new applicants, media reports said. The Saudi Central Bank (SAMA) is currently studying the applicants and will recommend them to higher authorities. The name of the applicants is not known yet.
The Kingdom licensed 16 Saudi financial technology companies in 2020 to provide services such as digital payments, consumer microfinance, and electronic insurance brokerage. SAMA authorised 32 financial technology companies to work under the umbrella of the legislative experimental environment dedicated to innovative financial services and products in the Kingdom.
Data released by SAMA revealed that stock marketed listed banks in the Kingdom reported a 14 percent rise in aggregate net profit before Zakat and tax to the tune of SR 4.02 billion in March 2021 as against SR 3.53 billion a year earlier.
Many experts forecast that banks in the Kingdom will maintain strong loan growth in 2021 as well. Data from Standard & Poor’s show bank credit expanded by 14.5 per cent last year and is projected to be in excess of 10 per cent this year.
Roman Rybalkin, an analyst at S&P said, “The 2020 loan growth mostly stemmed from mortgage and SME lending, as well as from drawdowns of credit lines, with corporates bracing for pandemic-related restrictions. We think banks’ lending will slightly exceed 10 per cent in 2021-2022 thanks to a stimulus for mortgages, and government and PIF investments in the economy.”
Image credit: www.centralbanking.com