The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Problems grow for foreign lenders in Saudi Arabia

How much does the Kingdom care about foreign investment?

Saudi banks’ third-quarter results might have been much worse given that the reporting period closely followed two of the most shocking credit events ever seen in the Kingdom. Aggregate net income of the seven Saudi banks covered by Credit Suisse fell 5% on the second quarter.

In the second quarter, debt repayment troubles at two of the Kingdom’s biggest businesses – the Saad and Al Gosaibi groups – raised concerns about what HSBC estimated was a total of between $4 billion and $7 billion owed to Saudi banks by the two groups. Afterwards, there was a general shying away from Saudi family businesses, exacerbating an earlier debt payment crisis among smaller private groups.

Provisions in the third quarter were around three times as big as in the same period in 2008 yet roughly equal to the provisions in the second quarter. The banks did not signal whether the provisions were related to the Saad and Al Gosaibi groups’ problems. But considering the pile of potentially distressed debt, it might appear that some Saudi banks were quietly confident that they would recoup their lending to the Saad and Al Gosaibi groups.

Market participants believe Saad took an important step towards clearing its debts in September.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree