Dubai: Samba Financial Group expects loan growth to pick up as higher oil prices enable Saudi Arabia to increase spending, the chief executive officer of the kingdom’s third-biggest lender said.
“We are expecting loan growth because now oil prices are going up,” Rania Nashar told Bloomberg TV. “We’re seeing more government spending and also on mortgage and small- and medium-sized enterprises.” Samba’s loan book shrank in 2018.
The world’s biggest oil exporter pledged to lift government expenditure by more than 7 per cent this year to help economic growth even as it grapples with the need to clip its fiscal deficit and curb crude output under an OPEC plan to support prices. Bank lending increased 3.3 per cent in the 12 months through February, according to the central bank.
The kingdom’s banking industry is also undergoing a transformation. Four of Saudi Arabia’s banks are in the process of merging in two separate deals.
Samba expects the mergers of its competitors to create “opportunities for the bank rather than challenges,” Nashar said. “Getting clients of two merged banks that don’t want to have concentration, or to get more talent. We’re seeing this as more of an opportunity.”
She said Samba isn’t planning a merger at the moment, but “we are looking at all the opportunities and studying all the proposals.”