KPMG’s latest report has initiated, that the KSA banking arena is shifting towards a better year, assisted by government modifications, as well as the stoppage within the credit damages (ECL), stabilized liquidity, robust CAR as well as revolution shifts.
KPMG conveyed that the 11 Tadawul-listed banks continued robust at the end of December 31, 2020 brilliant signs of recovery since reservations evolved in March 2020 and a hopeful outlook for FY 2021. These 11 banks are Arab National Bank, Alinma Bank, Al Rajhi Bank, Bank Al Bilad, Banque Saudi Fransi, Bank Al Jazira National Commercial Bank, Saudi British Bank, Saudi Investment Bank, Riyad Bank as well as Samba Financial Group.
The financial presentation of the 11 banks in 2020 conveyed a shortfall of only 6.32 per cent in net income – excluding the effect of a one of goodwill damage recorded by SABB.
Meanwhile, total assets amplified by 13.14 percent joining SAR 2,771 billion, against SAR 2,449 billion in 2019. Overall client deposits witnessed a 9.18 percent point out that calculating SAR 1,975 billion, as comparatively to SAR 1,809 billion in 2019, whereas, ECL witnessed an astounding upsurge to 39.05 percent involving SAR 17.33 billion, as comparatively to SAR 12.46 billion in 2019.
The analysis further reveals that 2020 positively in progress as a stimulating year due to pandemic, but for the banking industry in Saudi Arabia, it concluded as a year of dazzling “coherence” of industry and how the banks as well as the regulator can play a cooperative-role in economic recovery.
The Saudi Central Bank came out productively with the impetus program to provision borrowers and instantaneously aid the banks to quicken their digital journey for confirming the persistence of all banking services without physical interface with clients.
The KPMG report answers to post-pandemic era questions, reflecting on lessons learned in the field of operational suppleness, digital revolution and internal control. “The financial year 2021 is guaranteed to have a diverse landscape where we are anticipated to view the evolution of significant trends,
- Inclusive of the worth the digital banks will bring on the bench.
- How FinTech could be the players in the ecosystem, and how huge the banks strive with medium and smaller banks; how blue-chip corporates will have a restored trading power in a low interest rate ecosystem.”
He emphasized what the significances are for the industry itself: “Also the state-of-the-art operating inevitability will affect the salaries and we presumption to view more branch networks authentication.”
Khalil Ibrahim Al Sedais, managing partner Riyadh at KPMG in Saudi Arabia stated “In this report, we have incorporated a self-motivated shift in society and predilections of individuals, supervisory and compliance measures and digital quickening that was widely practical in preceding twelve months and projected to endure during the remaining 2021.”
The Covid-19 era has confirmed a renewed focus on the resolution of banks, displayed in diversity and gender inclusion matters and intensifying ESG agendas.