In a new report, S&P Global stated that the Saudi banks are expected to expand $65-$75 billion in new corporate loans in 2026, due to a high investment in the real estate and utilities sectors.
The report indicated that “We expect that corporate lending will continue to benefit from the opportunities arising from Vision 2030 projects.” The corporate loans had climbed to $70 billion on December 31, 2024, to November 30, 2025.
Retail lending, particularly mortgages, will tend to increase with further decreasing interest rates. Mortgages represent about half of total retail lending, which increased by 5 percent in the year to November 30, 2025.
S&P reported that the retail lending is projected to increase by $20 billion in 2026 from $18 billion as of November 30, 2025. The rating agency believes that Saudi banks will continue to be profitable this year despite the decrease in interest rates.
The robust lending expansion is expected to mitigate the pressure on net interest margins, which are likely to contract marginally. Banks’ return on average assets is estimated to drop slightly to 2.2 percent in 2026 due to the contraction and higher cost of risk.
The S&P indicated that all Saudi banks that it rates are stable and the rating is not likely to be changed in 2026. It further added that the leading risks include geopolitical turmoil and a decrease in oil prices.
