Saudi Arabia Retail Banking Market Size (2024 - 2029)

The Saudi Arabia retail banking sector is experiencing significant growth, driven by an increased focus on retail lending, which has become a crucial component of the banking industry's expansion. This segment's rapid development is supported by strong credit demand and government initiatives, such as subsidies and strategic plans aimed at enhancing homeownership. The market's expansion is further bolstered by low funding costs and the absence of pricing caps on retail loans, allowing banks to maintain high profitability. Despite the challenges posed by the COVID-19 pandemic, the sector has shown resilience, with banks adapting their strategies to capitalize on the lucrative retail lending market.

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Market Size of Saudi Arabia Retail Banking Industry

Saudi Arabia Retail Banking Market Summary
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

Saudi Arabia Retail Banking Market Major Players

*Disclaimer: Major Players sorted in no particular order

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 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
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Saudi Arabia Retail Banking Market Size Summary

The Saudi Arabia retail banking market is experiencing significant growth, driven primarily by the expansion of retail lending, which has become a crucial component of the banking sector's development. This segment has shown resilience during economic challenges, such as the COVID-19 pandemic, and continues to thrive due to strong demand for credit and supportive government policies. The Saudi government's Vision 2030 initiative, which emphasizes homeownership, has led to substantial government subsidies and guarantees for retail mortgages, further boosting the sector. The low funding costs and absence of caps on retail loan pricing have resulted in high margins, making retail lending a profitable venture for banks. As a result, Saudi banks are increasingly focusing on this segment, adjusting their strategies to enhance their retail lending portfolios and improve profitability metrics.

The rise in retail mortgage loans has not only provided banks with new growth avenues but has also stimulated economic activity across various sectors, including real estate, construction, and home furnishing. This growth has facilitated greater financial inclusion, allowing more individuals to access banking services and build assets. The introduction of innovative mortgage products, such as adjustable-rate and Islamic financing options, has attracted a broader customer base and intensified competition within the retail banking sector. Additionally, the emergence of digital banks in Saudi Arabia marks a significant shift towards digitalization, aiming to enhance banking efficiency and reach underbanked areas. These developments are expected to drive innovation among traditional banks, ensuring the Saudi banking sector remains competitive and aligned with global digital financial trends. The market is currently dominated by major players, but technological advancements and product innovations are enabling mid-size and smaller banks to expand their presence.

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Saudi Arabia Retail Banking Market Size - Table of Contents

  1. 1. MARKET INSIGHTS AND DYNAMICS

    1. 1.1 Market Overview

    2. 1.2 Market Drivers

      1. 1.2.1 Increasing Financial Literacy

      2. 1.2.2 The Spending by Retail Banks for digital banking is increasing in Saudi Arabia

    3. 1.3 Market Restraints

      1. 1.3.1 Limited Access to Funding for Fintech Startups

      2. 1.3.2 Changing Consumer Preferences and Behavior

    4. 1.4 Market Opportunities

      1. 1.4.1 Rising Demand for Digital Banking Solutions

    5. 1.5 Porter's Five Forces Analysis

      1. 1.5.1 Bargaining Power of Suppliers

      2. 1.5.2 Bargaining Power of Buyers

      3. 1.5.3 Threat of New Entrants

      4. 1.5.4 Threat of Substitutes

      5. 1.5.5 Intensity of Competitive Rivalry

    6. 1.6 Impact of Government Regulations on the Market

    7. 1.7 Impact of Technological Advancements on the Market

    8. 1.8 Impact of COVID-19 on the Market

  2. 2. MARKET SEGMENTATION

    1. 2.1 By Product

      1. 2.1.1 Transactional Accounts

      2. 2.1.2 Savings Accounts

      3. 2.1.3 Debit Cards

      4. 2.1.4 Credit Cards

      5. 2.1.5 Loans

      6. 2.1.6 Other Products

    2. 2.2 By Industry

      1. 2.2.1 Hardware

      2. 2.2.2 Software

      3. 2.2.3 Services

    3. 2.3 By Distributional Channel

      1. 2.3.1 Direct Sales

      2. 2.3.2 Distributor

Saudi Arabia Retail Banking Market Size FAQs

The Saudi Arabia Retail Banking Market is projected to register a CAGR of 6% during the forecast period (2024-2029)

Al-Rajhi Bank, Alinma Bank, Saudi British Bank, Riyad Bank and SNB are the major companies operating in the Saudi Arabia Retail Banking Market.

Saudi Arabia Retail Banking Market Report Snapshots

Saudi Arabia Retail Banking Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)