Saudi Arabia's commercial banks entered 2026 with strong capital and liquidity levels, keeping the sector well positioned to support continued lending despite a tighter funding environment. Capital adequacy ratios across the system stand at around 20–21%, comfortably above the minimums required under global Basel III standards.
The strength runs through the sector's core capital measures. The system-wide Tier 1 capital ratio is around 18–19% in early 2026, while the Common Equity Tier 1 (CET1) ratio sits at roughly 15–16% — a sign of solid capacity to absorb potential losses. To further reinforce resilience, the Saudi Central Bank raised the countercyclical capital buffer to 1%, effective May 2026, increasing the capital banks must hold against domestic credit exposures.
Liquidity remains healthy as well. Sector liquidity coverage ratios generally exceed 140–160%, with some major banks reporting above 180% — far higher than the 100% regulatory floor. Net stable funding ratios at leading banks stay above 120%, pointing to stable funding structures over a one-year horizon. Loan-to-deposit ratios are near or slightly above 100% at the system level, but individual banks remain within the Central Bank's prudential caps, with many large lenders below 85–90%.
Asset quality continues to support this picture. Non-performing loan ratios remain low at roughly 0.9–1.6% through 2025–2026, while coverage ratios above 150–160% add a further cushion. Although strong credit growth and monetary conditions have created a tighter liquidity environment, the buffers now in place are seen as sufficient to sustain balance-sheet expansion.
For residents and businesses in the Kingdom, these figures point to a stable and well-regulated banking system — a foundation that underpins everyday banking, financing, and the broader economy.
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