Saudi Arabia Retail Banking Market Size
| Study Period | 2020 - 2029 |
| Base Year For Estimation | 2023 |
| Forecast Data Period | 2024 - 2029 |
| Historical Data Period | 2020 - 2022 |
| CAGR (2024 - 2029) | 6.00 % |
| Market Concentration | Medium |
Major Players.webp "Saudi Arabia Retail Banking Market Major Players")
*Disclaimer: Major Players sorted in no particular order |
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Saudi Arabia Retail Banking Market Analysis
The Saudi Arabia Retail Banking Market is expected to register a CAGR of 6% during the forecast period(2024-2029).
Retail lending has been a high-growth segment in Saudi Arabia in recent years and a key driver behind the banking sector’s growth. While it mitigated the impact of the COVID-19 pandemic on Saudi Arabian banks' financial profiles, risks are emerging. Many Saudi Arabian banks have historically ignored retail lending but have expanded significantly recently and are now the primary engine of credit growth. The fast growth in this segment is expected to continue, underpinned by strong credit demand and support from government authorities. Various factors support the high growth, including strong margins on retail products and the Saudi government placing homeownership at the center of its Vision 2030 strategic plans. This has led to vast programs of government subsidies that boost margins and guarantees for retail mortgages.
Returns on retail portfolios are underpinned by unusually low funding costs, with retail loans largely funded by retail non-interest-bearing deposits (NIBs). The absence of caps on retail loan pricing also contributes to high margins. Therefore, banks with more retail lending have profitability metrics registering at the higher end. Saudi banks have been actively chasing retail lending, adjusting their strategies, and increasing their appetite for this segment.
The impact of the COVID-19 pandemic on Saudi Arabian banks was contained. At the same time, pressures on the operating environment eased, and economic activity gradually recovered, supported by higher oil prices.
Saudi Arabia Retail Banking Market Trends
Increase in Saudi Retail Mortgage Loans Driving the Market
The availability of mortgage loans has facilitated increased homeownership among Saudis. This has led to a higher demand for housing and, consequently, an expansion in the real estate sector. The growth in mortgage loans has stimulated economic activity, benefiting various industries associated with the housing market, such as construction, home furnishing, and interior design. The expansion of retail mortgage loans has promoted financial inclusion by enabling individuals who were previously unable to purchase a home to enter the housing market. This has allowed a broader section of the population to access banking services and build assets, contributing to overall economic stability and growth.
The rise in retail mortgage loans has provided a new avenue of growth for banks operating in Saudi Arabia. Banks have experienced an increase in their loan portfolios, resulting in higher interest income. This has positively impacted their profitability and allowed them to diversify their lending activities beyond traditional corporate and commercial lending. The increasing demand for mortgage loans has led to the development of innovative mortgage products tailored to the needs of Saudi consumers. Banks have introduced various financing options, such as adjustable-rate mortgages, fixed-rate mortgages, and Islamic financing alternatives compliant with Shariah principles. This product diversification has attracted more customers and enhanced competition within the retail banking sector.
Rising Digitalization in Saudi Arabian Banking Sector is Driving the Market
The move towards digitalization was most evident in the granting of licenses to the two first fully digital banks in Saudi Arabia in the previous year. The move included Saudi Telecom’s STC Pay being renamed STC Bank with a capital of SAR 2.5 billion (USD 0.67 billion) and Saudi Digital Bank (SDB) gaining a capital of SAR 1.5 billion (USD 0.4 billion). These new licenses embody the country’s desire to become a financial hub and increase the efficiency and penetration of its banking system. The impact of these digital banks is hard to gauge, but it is safe to assume that they will be appealing to the underbanked areas of Saudi Arabia, where established banks have few or no branches. With bank penetration at 72% but internet penetration forecast to reach 97% in 2025, digital banks have a clear target audience. Their sector-wide significance will likely come from spurring innovation among the country’s older banks and ensuring Saudi Arabian society is at the forefront of advancements within the (digital) financial system. STC Pay and SDB will fall under the same regulatory framework as other Saudi Arabian banks.
Saudi Arabia Retail Banking Industry Overview
Saudi Arabia's retail banking market is consolidated. The report covers major international players operating in the Saudi Arabian retail banking market. In terms of market share, a few major players currently dominate the market. However, with technological advancements and product innovation, mid-size to smaller companies are increasing their market presence by securing new contracts and tapping new markets. Companies including Al Rajhi Bank, Saudi National Bank, National Commercial Bank, Alinma Bank, Saudi British Bank, and others have been profiled in the report.
Saudi Arabia Retail Banking Market Leaders
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Al-Rajhi Bank
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Alinma Bank
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Saudi British Bank
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Riyad Bank
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SNB
*Disclaimer: Major Players sorted in no particular order
Saudi Arabia Retail Banking Market News
- February 2022: The Ministry of Municipal and Rural Affairs and Housing honored the Saudi National Bank for its efforts in serving the housing sector within the donor community after the bank announced the completion of the delivery of its community housing initiative, which resulted in the provision of 500 housing units to the beneficiaries of the housing development program from 2017 to 2021, including 361 fully-furnished housing units and 139 housing units, supported by purchasing cards.
- January 2022: Saudi National Bank announced the completion of the merger between Samba Financial Group and NCB, which is the fastest and largest merger in the history of Saudi Arabia. The merger resulted in the establishment of the largest banking entity in Saudi Arabia with assets of more than USD 239.7 billion.
Saudi Arabia Retail BankingMarket Report - Table of Contents
1. INTRODUCTION
- 1.1 Study Assumptions and Market Definition
- 1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS AND DYNAMICS
- 4.1 Market Overview
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4.2 Market Drivers
- 4.2.1 Increasing Financial Literacy
- 4.2.2 The Spending by Retail Banks for digital banking is increasing in Saudi Arabia
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4.3 Market Restraints
- 4.3.1 Limited Access to Funding for Fintech Startups
- 4.3.2 Changing Consumer Preferences and Behavior
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4.4 Market Opportunities
- 4.4.1 Rising Demand for Digital Banking Solutions
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4.5 Porter's Five Forces Analysis
- 4.5.1 Bargaining Power of Suppliers
- 4.5.2 Bargaining Power of Buyers
- 4.5.3 Threat of New Entrants
- 4.5.4 Threat of Substitutes
- 4.5.5 Intensity of Competitive Rivalry
- 4.6 Impact of Government Regulations on the Market
- 4.7 Impact of Technological Advancements on the Market
- 4.8 Impact of COVID-19 on the Market
5. MARKET SEGMENTATION
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5.1 By Product
- 5.1.1 Transactional Accounts
- 5.1.2 Savings Accounts
- 5.1.3 Debit Cards
- 5.1.4 Credit Cards
- 5.1.5 Loans
- 5.1.6 Other Products
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5.2 By Industry
- 5.2.1 Hardware
- 5.2.2 Software
- 5.2.3 Services
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5.3 By Distributional Channel
- 5.3.1 Direct Sales
- 5.3.2 Distributor
6. COMPETITIVE LANDSCAPE
- 6.1 Market Concentration Overview
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6.2 Company Profiles
- 6.2.1 National Commercial Bank
- 6.2.2 Alinma Bank
- 6.2.3 Saudi British Bank
- 6.2.4 Riyad Bank
- 6.2.5 Banque Saudi Fransi
- 6.2.6 Arab National Bank
- 6.2.7 Saudi Investment Bank
- 6.2.8 Alawwal Bank
- 6.2.9 Saudi National Bank
- 6.2.10 Al Rajhi Bank*
- *List Not Exhaustive
7. INVESTMENT ANALYSIS ON THE SAUDI ARABIAN RETAIL BANKING MARKET
8. FUTURE OF THE SAUDI ARABIAN RETAIL BANKING MARKET
9. APPENDIX
Saudi Arabia Retail Banking Industry Segmentation
Retail banking, also known as consumer banking, includes the provision of services such as transactional and savings accounts, personal loans, mortgages, credit and debit cards, and others to the general public by banking institutions. A complete background analysis of the Saudi Arabian retail banking market is covered in the report, including an assessment of the parental market, emerging trends by segments and regional markets, significant changes in market dynamics, and a market overview.
The Saudi Arabian retail banking market is segmented by product (transactional accounts, savings accounts, debit cards, credit cards, loans, and other products), industry (hardware, software, and services), and channel (direct sales and distributor).
The report offers market size and forecasts for the Saudi Arabian retail banking market in value (USD) for all the above segments.
| By Product | Transactional Accounts |
| Savings Accounts | |
| Debit Cards | |
| Credit Cards | |
| Loans | |
| Other Products | |
| By Industry | Hardware |
| Software | |
| Services | |
| By Distributional Channel | Direct Sales |
| Distributor |
Saudi Arabia Retail BankingMarket Research FAQs
What is the current Saudi Arabia Retail Banking Market size?
The Saudi Arabia Retail Banking Market is projected to register a CAGR of 6% during the forecast period (2024-2029)
Who are the key players in Saudi Arabia Retail Banking Market?
Al-Rajhi Bank, Alinma Bank, Saudi British Bank, Riyad Bank and SNB are the major companies operating in the Saudi Arabia Retail Banking Market.
What years does this Saudi Arabia Retail Banking Market cover?
The report covers the Saudi Arabia Retail Banking Market historical market size for years: 2020, 2021, 2022 and 2023. The report also forecasts the Saudi Arabia Retail Banking Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
What role do technological advancements and digital transformation play in shaping the future of Retail Banking Sector in Saudi Arabia?
Technological advancements and digital transformation are key drivers of change in the Retail Banking Sector in Saudi Arabia, prompting banks to invest in online and mobile banking solutions. Additionally, the rise of fintech startups is introducing innovative products and services, forcing traditional banks to remain competitive.
Saudi Arabia Retail BankingIndustry Report
The Saudi Arabia retail banking market is experiencing transformative growth, driven by technological advancements, changing consumer preferences, and regulatory reforms aimed at financial inclusion. This sector is pivotal in supporting retail companies in Riyadh and throughout the country, focusing on delivering convenient and personalized banking experiences. With significant shifts towards online and digital platforms, retail banks are enhancing customer interactions and operational efficiencies, catering to the needs of top retail ventures in Saudi Arabia. By diversifying offerings across loans, savings accounts, and innovative payment solutions, banks address the needs of the increasingly tech-savvy younger generation and small businesses. This evolution is reflective of the growing Saudi Arabia retail market size. Market segmentation analysis offers a detailed breakdown by products like transactional accounts, credit facilities, and various channels including direct sales and distributors. There is a strong emphasis on digital transformation, with substantial investments in digital infrastructure to meet consumer demands while ensuring robust data security and adherence to regulatory standards. For more detailed statistics and growth projections, Mordor Intelligence™ provides an analysis including market share, size, and a forecast outlook, available for download as a free report PDF.
