Saudi banks’ credit profiles remain solid, with financial metrics displaying lower sensitivity to economic downturns than most GCC peers, said Fitch Ratings in a new report. 

The Saudi operating environment is favourable, as reflected in our ‘bbb+’ score, which is the highest in the GCC (along with the UAE). 

It is underpinned by still-high government spending, ongoing economic diversification and non-oil growth under Vision 2030, as well as progress on giga projects.

Saudi banks have grown at roughly twice the GCC average since the pandemic, though growth began moderating in H2 last year. 

"We estimate full-year 2025 growth remained strong at about 13%, but expect growth to slow to 10%–11% in 2026. This moderation will reflect natural credit saturation after several years of rapid expansion, and increased competition for funding, which drove a 30bp increase in the sector-average cost of funding in 3Q25 versus 2024 despite interest rate cuts and more stringent capital regulation," stated Fitch in its review.

"We continue to view funding and liquidity as rating strengths for Saudi banks, despite tighter liquidity, and expect this to remain the case in 2026. Banks have preserved meaningful liquidity buffers and strong access to diverse funding sources. This supports resilience at a time of moderating growth and in a more competitive deposit landscape," it added.-TradeArabia News Service