Coverage: weekly note · Information to 2 July 2025
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TGB Weekly Research Note · 2 July 2025
Saudi Central Bank data show bank credit up 5.0% in the first quarter of 2025, ahead of a 4.2% rise in deposits, while gross credit in the UAE grew 2.7%.
The desk view
Saudi bank credit to the private and public sectors rose 5.0% in the first quarter of 2025 to SAR 3,102.0 billion, up 16.3% on a year earlier. That was quicker than the quarterly rates the Saudi Central Bank (SAMA) reported through 2024, which ranged from 3.1% to 3.7%. In the UAE, gross credit grew 2.7% to AED 2,240.0 billion, close to the 2.8% of a year earlier. The two systems differ most on funding: Saudi deposits rose 4.2%, leaving credit at 110.6% of deposits, whereas UAE deposits exceeded gross credit. Our reading is that Saudi Arabia is leading loan growth on a deposit base that is growing more slowly than its loan book.
Saudi credit growth stepped up
SAMA's quarterly figures show bank credit rising by between 3.1% and 3.7% in each quarter of 2024, ending the year at SAR 2,955.6 billion. In the first quarter of 2025 growth accelerated to 5.0%, 1.4 percentage points faster than in the fourth quarter of 2024, adding SAR 146.4 billion in three months.
Saudi bank credit growth, quarter on quarter, %
Source: Saudi Central Bank (SAMA), Key Economic Developments Q1 2024, 27 June 2024; Saudi Central Bank (SAMA), Key Economic Developments Q2 2024, 8 September 2024; Saudi Central Bank (SAMA), Key Economic Developments Q3 2024, 19 December 2024; Saudi Central Bank (SAMA), Key Economic Developments Q4 2024, 26 March 2025; Saudi Central Bank (SAMA), Key Economic Developments Q1 2025, 19 June 2025.
Public-sector lending grew fastest
Credit to the private sector rose 4.8% in the first quarter of 2025 to SAR 2,884.6 billion, after 2.7% in the fourth quarter of 2024. Credit to the public sector grew about 7.0% to SAR 217.3 billion, 38.0% higher than a year earlier. Real estate loans rose 4.4% to SAR 922.2 billion, while consumer loans grew 1.9% to about SAR 479.8 billion. With both growing more slowly than total credit, the pick-up came from other lending, including to the public sector.
The UAE and Bahrain grew more slowly
UAE gross credit rose 2.7% quarter on quarter to AED 2,240.0 billion at the end of March 2025, an annual increase of 9.4%. That was up from 0.9% in the fourth quarter of 2024 but in line with the 2.8% of the first quarter of 2024. Personal loans to residents grew 3.5% to AED 505.9 billion, and customer deposits rose 3.1% to AED 2,936.4 billion. The capital adequacy ratio stood at 17.6%, against a minimum requirement of 13.0%. In Bahrain, loans and credit facilities to resident sectors reached BD12.4 billion at the end of April 2025, only 1.8% higher than a year earlier. The Bahraini banking sector's capital adequacy ratio was 20.6% in the first quarter, down from 22.2% a year before.
Bank credit and deposits, Q1 2025
| Measure | Saudi Arabia | UAE |
|---|---|---|
| Bank credit, end of Q1 2025 | SAR 3,102.0bn | AED 2,240.0bn |
| Credit growth, quarter on quarter | 5.0% | 2.7% |
| Credit growth, year on year | 16.3% | 9.4% |
| Deposit growth, quarter on quarter | 4.2% | 3.1% |
| Credit as % of deposits | 110.6% | 76.3% |
Source: Saudi Central Bank (SAMA), Key Economic Developments Q1 2025, 19 June 2025; Central Bank of the UAE (CBUAE), Quarterly Monetary, Banking & Financial Markets Developments Report, 2025 - 1st Quarter, 31 May 2025.
Funding is the constraint to watch
Saudi deposits rose SAR 111.9 billion in the first quarter of 2025 to SAR 2,804.3 billion, short of the SAR 146.4 billion increase in credit. Credit therefore rose to 110.6% of deposits, from 109.8% at the end of 2024. The implication is that sustaining this pace requires Saudi banks to fund beyond their deposit base, while UAE banks can still lend from their own deposits.
Primary sources: Saudi Central Bank (SAMA), Key Economic Developments Q1 2025, 19 June 2025; Central Bank of the UAE (CBUAE), Quarterly Monetary, Banking & Financial Markets Developments Report, 2025 - 1st Quarter, 31 May 2025; Saudi Central Bank (SAMA), Key Economic Developments Q4 2024, 26 March 2025; Saudi Central Bank (SAMA), Key Economic Developments Q3 2024, 19 December 2024; Saudi Central Bank (SAMA), Key Economic Developments Q2 2024, 8 September 2024; Saudi Central Bank (SAMA), Key Economic Developments Q1 2024, 27 June 2024; Central Bank of Bahrain (CBB), CBB holds third Board meeting for 2025 (press release), 15 June 2025.