Saudi Banks Post Strong First-Quarter Profits Amid Steady Lending Growth

Saudi Arabia’s leading banks reported solid earnings for the first quarter of 2026, supported by continued lending expansion and stable operating income, even as regional tensions cast uncertainty over global markets.

Saudi National Bank, the Kingdom’s biggest lender, posted a net profit of SR6.42 billion ($1.71 billion) for the three months ending March 31, marking a 6.66 percent increase compared with the same period last year. The bank said the rise was driven by higher operating income and a sharp reduction in expenses.

According to its filing on Tadawul, total operating income edged up to SR9.7 billion, while operating expenses fell by 19.4 percent, helped by lower rent and premises-related costs. Income from financing activities also increased, reaching SR11.37 billion, reflecting steady demand for credit.

Riyad Bank also recorded growth, reporting a net profit of SR2.61 billion in the first quarter, up 5.13 percent year-on-year. The bank attributed its performance to stronger trading income and higher returns from financing, despite some declines in other revenue streams.

Lower credit loss provisions played a key role in supporting Riyad Bank’s results, with net expected credit losses dropping by nearly 24 percent. Operating costs also declined, although this was partly offset by higher staff expenses and investment impairments. Its income from financing rose to SR5.99 billion, reflecting continued expansion in lending activities.

The strongest performance among the Kingdom’s major lenders came from Al Rajhi Bank, which posted a 14.32 percent increase in net profit to SR6.75 billion. The bank said the growth was driven by an 18.4 percent rise in financing and investment income, alongside higher fees from banking services and foreign exchange operations.

Analysts say the banking sector’s resilience is supported by strong financial buffers and government backing. In March, Fitch Ratings noted that Gulf Cooperation Council banks face limited short-term credit risks from the Iran conflict, citing robust capital positions.

The upbeat results align with earlier projections from S&P Global, which forecast continued lending growth in 2026. The agency pointed to rising demand for financing linked to Saudi Arabia’s Vision 2030 projects, particularly in real estate, utilities and retail sectors.

Despite external pressures, including geopolitical tensions affecting energy markets, Saudi banks appear to be maintaining steady momentum. Industry observers say sustained investment activity and strong domestic demand are likely to keep the sector on a growth path in the months ahead.