Saudi Banks Put Up Impressive Performance in Q2

Supported by a resilient financial sector, Saudi Arabia’s trop 10 listed banks have achieved record-breaking quarterly earnings reporting their highest-ever profits during the second quarter of 2025, Arabic daily Asharq Al-Awsat said.

According to the financial disclosures, profits surged by 17.65% y-o-y, increasing by $944 million to reach $6.13 billion, compared with $5.21 billion in the same period of 2024, the report said.

This exceptional performance was driven by all ten listed banks on the Saudi stock exchange, highlighting the continued strength and the banks include the Saudi National Bank (SNB), Al Rajhi Bank, Riyad Bank, SAB (Saudi Awwal Bank), Banque Saudi Fransi, Arab National Bank, Alinma Bank, Bank Albilad, Saudi Investment Bank, and Bank AlJazira.

Al Rajhi Bank led the sector in both net profit and growth, posting earnings of more than $1.64 billion, an impressive 30.9% increase compared to the same quarter last year. Close behind was Saudi National Bank, which reported profits just over $1.64 billion, marking a growth rate of 17.3%. Riyad Bank came third with $690 million in profits, reflecting an 11.1% increase.

In its Article IV consultation report published in June, the International Monetary Fund (IMF) affirmed the Saudi banking sector’s resilience, citing its strong capitalisation and profitability despite rising financing costs. Similarly, financial advisory firm Alvarez & Marsal noted the sector’s robust credit growth, cost-efficiency, and financial flexibility.

Hamad Al-Olayan, CEO of investment firm Villa Capital, emphasized that the Saudi banking sector’s performance merits deeper analysis and highlighted the sector’s consistent growth over the past 15 years, driven by capital increases, expanded lending, and strategic expansion.

Al-Olayan also noted that the sector has become the most attractive in the Saudi financial market for both local and international investors, dominating equity fund holdings due to its stable returns and strong fundamentals.

Banks Play Key Role

“The banking sector has played a key role in maintaining the stability of the Saudi stock market index, especially as other sectors such as petrochemicals and cement, have struggled and dragged down overall market sentiment,” he said.

Without the performance of Al Rajhi Bank’s stock, the market index would likely be hovering between 9,300 and 9,500 points.

Looking ahead, Al-Olayan expects banks to lead the next phase of market growth, especially if interest rates begin to decline and economic clarity improves. He projected that the banking sector could drive the stock market index toward the 14,000-point mark.

He also stressed the sector’s vital role in financing projects across all scales, noting that many banks have already increased their capital and lending activity in response to growing demand.

Al-Olayan predicted that both Al Rajhi and SNB may announce capital increases and generous dividends by the end of the year, further boosting investor confidence.