Saudi Bank Liquidity Stable as Mortgages Slow in 2026
Saudi banks entered 2026 with comfortable liquidity levels even as new residential mortgage lending slowed for a second year, Domestic liquidity, measured by money supply (M3), reached about SAR 3.289 trillion by the end of February 2026, an 8.4% increase compared with a year earlier, pointing to ample funds across the banking system.
Liquidity indicators remained healthy through the first quarter. The aggregate loan-to-deposit ratio (LDR) eased to roughly 104.1% in Q1 2026 from about 106.5% in the final quarter of 2025, reflecting stronger deposit growth. The sector's Liquidity Coverage Ratio (LCR) averaged around 172%, well above the 100% minimum set by the Saudi Central Bank, with leading banks posting LCRs above 250% and high-quality liquid assets exceeding SAR 160 billion.
Total bank credit continued to expand in 2026, rising around 2–3% between January and May to reach roughly SAR 3.42 trillion by mid-year, though at a slower pace than the same period in 2025.
Mortgage lending cools
New residential mortgage lending has been the softer spot. In 2025, banks issued about SAR 80.4 billion in new home loans, down 12% year on year, with an additional SAR 2.49 billion from finance companies, for a combined SAR 82.9 billion versus SAR 93.6 billion in 2024. The average new mortgage contract stood at about SAR 739,000 across roughly 108,800 contracts.
The slowdown deepened in early 2026. Average monthly new mortgage financing in the first half of the year was near SAR 5.4 billion, down about 31.3% from the same period in 2025. May 2026 registered around SAR 4.4 billion, its weakest May since 2018. A rebound followed in June, with new financing climbing to about SAR 5.7 billion, up 30.4% month on month and roughly 7% year on year.
For residents planning to buy a home, the figures suggest a more measured lending market, while stable overall liquidity keeps the wider banking sector on firm ground.
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