Saudi bank loans to businesses rebound

Riyadh: Saudi Arabian bank lending to businesses rose in May at the fastest pace for nine months, indicating a gradual return to credit availability.

Lending to the private sector increased an annual 3.9 per cent in May, up from 2.4 per cent in April, the Saudi Arabian Monetary Agency, the country's central bank, said on its website yesterday.

Banks in the Arab world's largest economy had been reluctant to resume lending even after the central bank cut interest rates and the government announced a $400 billion (Dh1.46 trillion) spending programme to restart the economy. Non-government business accounts for about half of the kingdom's gross domestic product.

"There is a steady but sure increase in private sector lending," said John Sfakianakis, chief economist at Riyadh-based Banque Saudi Fransi.