Saudi Arabia's stimulus measures and close monitoring by the central bank have paid off as loan growth is accelerating and liquidity picking up in the kingdom's banking sector.
Monthly loan growth has hit its highest this year, data from the Saudi Arabian Monetary Agency (SAMA) and Morgan Stanley showed.
Loan growth in September rose 1.3 per cent compared with August, for a growth rate of 5.1 per cent for the year so far, exceeding Morgan Stanley's 5 per cent growth estimate for the full year.
Public sector loans also showed strength, growing 9.6 per cent in September from a weak August.
As liquidity has recovered so has the sector's balance sheet, which picked up 1.3 per cent in September after contracting for two months.
The country's real estate development fund, set up in the 1970s to provide property loans to citizens, is also forecast to strengthen the sectors' loan portfolio.
The fund recently abolished a rule that individuals must own land to qualify for a loan of 300,000 riyals, which should make home ownership available to a bigger cross-section of the population.
"This is like heaven for the banks," said Alfred Fayek, the head of equity sales at EFG-Hermes. "It will give the sector more for its loan portfolio. Saudi Arabia has one of the highest populations within the GCC and the property sector is booming, so it's a great move."
Saudi Arabia's GDP of 1.41 trillion riyals and population of 27 million has given the banks a stronger base for loan growth than institutions in many other GCC countries.
On the down side, Saudi banks experienced their lowest monthly earnings for the sector so far this year.
Aggregate sector earnings in September contracted 84 per cent compared with September last year - the sharpest drop this year.
But the ratings agency Moody's Investors Service expects the banking sector's net income to be modestly higher in the fourth quarter and into next year compared with the past two years.
The earnings show banks are looking to clean up their non-performing loans and come out next year with a clean balance sheet, Mr Fayek said.
farah.halime@thenational.ae
Tamkeen's offering
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Ruwais timeline
1971 Abu Dhabi National Oil Company established
1980 Ruwais Housing Complex built, located 10 kilometres away from industrial plants
1982 120,000 bpd capacity Ruwais refinery complex officially inaugurated by the founder of the UAE Sheikh Zayed
1984 Second phase of Ruwais Housing Complex built. Today the 7,000-unit complex houses some 24,000 people.
1985 The refinery is expanded with the commissioning of a 27,000 b/d hydro cracker complex
2009 Plans announced to build $1.2 billion fertilizer plant in Ruwais, producing urea
2010 Adnoc awards $10bn contracts for expansion of Ruwais refinery, to double capacity from 415,000 bpd
2014 Ruwais 261-outlet shopping mall opens
2014 Production starts at newly expanded Ruwais refinery, providing jet fuel and diesel and allowing the UAE to be self-sufficient for petrol supplies
2014 Etihad Rail begins transportation of sulphur from Shah and Habshan to Ruwais for export
2017 Aldar Academies to operate Adnoc’s schools including in Ruwais from September. Eight schools operate in total within the housing complex.
2018 Adnoc announces plans to invest $3.1 billion on upgrading its Ruwais refinery
2018 NMC Healthcare selected to manage operations of Ruwais Hospital
2018 Adnoc announces new downstream strategy at event in Abu Dhabi on May 13
Source: The National
At Eternity’s Gate
Director: Julian Schnabel
Starring: Willem Dafoe, Oscar Isaacs, Mads Mikkelsen
Three stars
Stuck in a job without a pay rise? Here's what to do
Chris Greaves, the managing director of Hays Gulf Region, says those without a pay rise for an extended period must start asking questions – both of themselves and their employer.
“First, are they happy with that or do they want more?” he says. “Job-seeking is a time-consuming, frustrating and long-winded affair so are they prepared to put themselves through that rigmarole? Before they consider that, they must ask their employer what is happening.”
Most employees bring up pay rise queries at their annual performance appraisal and find out what the company has in store for them from a career perspective.
Those with no formal appraisal system, Mr Greaves says, should ask HR or their line manager for an assessment.
“You want to find out how they value your contribution and where your job could go,” he says. “You’ve got to be brave enough to ask some questions and if you don’t like the answers then you have to develop a strategy or change jobs if you are prepared to go through the job-seeking process.”
For those that do reach the salary negotiation with their current employer, Mr Greaves says there is no point in asking for less than 5 per cent.
“However, this can only really have any chance of success if you can identify where you add value to the business (preferably you can put a monetary value on it), or you can point to a sustained contribution above the call of duty or to other achievements you think your employer will value.”
MATCH INFO
Uefa Champions League semi-finals, second leg:
Liverpool (0) v Barcelona (3), Tuesday, 11pm UAE
Game is on BeIN Sports
Top financial tips for graduates
Araminta Robertson, of the Financially Mint blog, shares her financial advice for university leavers:
1. Build digital or technical skills: After graduation, people can find it extremely hard to find jobs. From programming to digital marketing, your early twenties are for building skills. Future employers will want people with tech skills.
2. Side hustle: At 16, I lived in a village and started teaching online, as well as doing work as a virtual assistant and marketer. There are six skills you can use online: translation; teaching; programming; digital marketing; design and writing. If you master two, you’ll always be able to make money.
3. Networking: Knowing how to make connections is extremely useful. Use LinkedIn to find people who have the job you want, connect and ask to meet for coffee. Ask how they did it and if they know anyone who can help you. I secured quite a few clients this way.
4. Pay yourself first: The minute you receive any income, put about 15 per cent aside into a savings account you won’t touch, to go towards your emergency fund or to start investing. I do 20 per cent. It helped me start saving immediately.
