An increase in oil prices is apparently the cause of upward trends experienced recently by ten Saudi banks. These banks cited growth of more than 440 billion Saudi riyals ($117.3 billion), with capital exceeding SR 50 billion, according to Jeddah Arab News.
Oil prices, which in 1999 stood at $17 per barrel, are currently wavering around $27 per barrel.
Credit granted to the public fell by 13 percent in 2000, indicating increased available capital in the hands of the public, and thus the declining need to borrow from financial institutions.
Saudi government coffers also experienced the positive side effects of heightened oil revenues. For the first time in nearly 20 years, the government experienced a budget surplus of about SR 45 billion. In addition, the country’s GDP climbed nearly 4.1 percent in 2000.
However, the Saudi banking sector is still seeking means of increasing profits from the efficiency of its operations. For example, the recent introduction of Internet banking has lead to increased profits through improved delivery and capability of banking systems. –(MENA Report)
© 2001 Mena Report (www.menareport.com)
