Saudi Central Bank Affirms Banking Stability in 2026

The Saudi Central Bank has reaffirmed its focus on financial stability, pointing to strong banking liquidity, robust private-sector credit growth and solid capital levels across the sector. Its latest Financial Stability Report says banking assets remained robust in 2024, supported by notable private-sector lending and higher public-sector financing.

The average capital adequacy ratio (CAR) of Saudi banks stood at 19.6% in 2024, slightly below the 20.1% recorded in 2023, with a median of 18.9%. By mid-2026, sector capital and reserves reached around SAR 620–624 billion, keeping CAR levels near 20–21% — comfortably above regulatory and Basel minimums.

To strengthen precautionary buffers, in May 2025 the central bank decided to raise the Countercyclical Capital Buffer to 1%, effective May 2026. The loan-to-deposit ratio cap remains at 90%, and banks are operating below it, leaving room for further credit growth without breaching prudential limits.

Private-sector credit reached about SAR 3.3 trillion in January 2026, growing roughly 10.4% year-on-year, before easing to about SAR 3.2 trillion in April–May 2026 with growth of 6.6–7.2% — a sign of sustained but more moderate expansion. Liquidity remains strong, with a sector-wide liquidity coverage ratio of about 172% in the first quarter of 2026, and broad money (M3) near SAR 3.2 trillion alongside reserve assets of around SAR 1.7 trillion.

Why it matters

For residents and businesses, these indicators point to a well-capitalised banking system with ample liquidity and low risk. Non-performing loans stood at around 1.0% of total loans in 2025 — the lowest in a decade — signalling high asset quality. The Saudi riyal also remains pegged to the US dollar, a fixed exchange-rate anchor that continues to support monetary and financial stability.

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