Saudi Arabia’s finance companies have demonstrated outstanding performance as their total assets reached SR67 billion ($17.85 billion) in 2021, a 26 percent increase from 2020, according to a report by the Saudi Central Bank, also known as SAMA.
Aggregate capital surged 37 percent to SR19.6 billion in 2021 from SR14.3 billion in 2020.
Net profits also skyrocketed by 114 percent in 2021, achieving SR1.9 billion, the report stated.
The credit portfolio stood at SR68.1 billion at the end of 2021, a 26 percent rise from its value in 2020.
New financing provided during 2021 amounted to SR25.4 billion, a 47 percent increase from 2020.
Shareholder’s equity increased 30 percent to SR25.5 billion in 2021 compared to SR19.6 billion in 2020, the report added.
Looking at net profits breakdown by type of finance company, the non-real-estate ones have recorded SR1.4 billion while real estate finance companies received a net profit of SR0.4 billion in 2021.
Moreover, the share of non-real-estate finance companies in the total credit portfolio was 62 percent versus 38 percent for real estate finance ones.
The breakdown of credit portfolio by customer segment is 75 percent for retail customers, 22 percent for micro, small and medium enterprises, and 3 percent for corporates.
In the case of credit portfolio as per primary sectors, residential real estate made up 32 percent, followed by auto-finance loans at 27 percent and personal credit at 21 percent.
Evaluating the credit portfolio breakdown by economic activity, the top three sectors with the highest shares were trade at 21 percent, construction at 20 percent, services at 14 percent, and transportation and telecommunications at 9 percent.
Another 22 percent of loan facilities went into other services not mentioned in detail.
As for nonperforming loans, their share in the total lending portfolio of real estate finance companies stood at 4.9 percent in 2021, while the figure for non-real-estate finance companies was double that at 10.1 percent. The aggregate share of such loans for all finance companies stood at 8.6 percent in 2021.
With regards to nonperforming loans by type of activity financed, the loans provided to finance equipment recorded the highest share in total lending provided for that particular activity at 28.9 percent, followed by auto finance at 12 percent, other activity and commercial real estate at 8 percent each, consumer finance at 7 percent.
The share of nonperforming loans provided for residential real estate stood at 4.1 percent and credit card loans at 1.4 percent, respectively.
As for the breakdown of nonperforming loans by customer type, the share of such loans was the highest in the corporate segment at 21 percent, followed by MSME at 10.8 percent and retail at 6.8 percent.—AN
