Saudi based investment bank Al Rajhi Capital believes that Saudi Arabia’s banking sector offers strong buying opportunities amid the current sell-off in Tadawul where the bank index is down 10% since the end of September 2022.
Following the government budget statement, which has strong GDP forecasts for the medium term, the brokerage in a new report raised loan growth estimates, driven by corporate loans.
It raised total loan growth estimates for 2022 and 2023 to 14% and 12%, respectively, from 13% and 11% earlier. It also revised the loan growth estimates for 2024e and 2025e to over 11% in 2024e and almost 11% in 2025e (from 9% and 7%, respectively).
Al Rajhi raised corporate loan growth estimate to 13% each in 2022e and 2023e from 10% before, while raising the estimate for 2024-2026e to 14%/14%/10% from average 7.0% growth in each year before.
According to the report, the SME segment has been the key driver for corporate loan segment in the recent years supported by various governmental measures.
This report’s information was first seen on Zawya.com; to read more, click this link.
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