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Illustration: Kevin February |
There is a growing worry in Saudi Arabia that low oil prices are here to stay. But it is not just the government that is having to adapt to a new reality of deficits, trimmed spending and capital market issuance. Banks, too, are feeling their way through a very different environment.
The banks themselves tend to be reluctant to discuss their liquidity, but their annual results have been revealing. According to Moody’s, bank results released so far this year indicate a slowdown in deposit growth from 12% in 2014 to 1% in 2015, and it is likely to get worse.
That said, the figures may represent a slowdown but not yet a contraction, which is perhaps a surprise.
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