Riyadh: Amid a likely increase in retail spending, more Saudis took to personal loans in the first three months of 2022 as the Kingdom continues to recover from the aftermath of the pandemic.

According to the latest figures from the Central Bank of Saudi Arabia, total loans granted by Saudi finance companies increased by 4.4% to reach SR 71.1 billion at the end of the first quarter of 2022, against 68.2 billion SR. SR in the previous quarter.

The growth came mainly from personal loans, which increased by SR 1.8 billion to reach SR 16.3 billion at the end of the first quarter. This was supplemented by another increase of SR 0.5 billion which the banks classify as “other” loans.

Central bank data further revealed that home loans increased by 1.3% to SR26 billion in the first quarter compared to the last quarter of 2021. Of these, retail loans accounted for 85, 4% at the end of the first quarter, compared to just 14.6% of commercial real estate loans.

Compared to the fourth quarter of 2021, commercial real estate loans recorded a higher growth rate at 4.74% compared to an increase of 0.72% observed for personal loans.

As for total non-personal loans by finance companies, they increased by 3.9% to reach SR 17.5 billion at the end of the first quarter. During the same period, retail loans increased by 4.5% to SR53.6 billion. Compared to the same quarter last year, retail lending by finance companies increased by 22% to SR43.9 billion.

Looking at the breakdown of non-retail loans by borrower sector, the construction sector constituted the highest share at 23% and totaled around SR 4 billion in the first quarter.

The commerce sector came second with a 21.5% share, followed by the services sector which claimed a 15.5% share in the first quarter.

Regarding the distribution of non-retail borrowers by size, the aggregate share of micro, small and medium-sized enterprises was 87%, with the remaining share contributed by other non-SME enterprises.

Saudi financial companies and real estate refinance companies reported aggregate assets of SR70.3 billion ($18.75 billion) at the end of the first quarter of 2022.

These results include Saudi Refinance Co., whose contribution share is almost a quarter of the total.

Assets of financial companies increased by 5% compared to the end of the previous quarter and by 20.7% compared to the same quarter of 2021. Non-real estate financial companies constituted about 55% of total assets at the end of the first quarter, while companies specializing in real estate finance accounted for around 21%.

Net income generated by all financial companies increased from SR 103 million in the last quarter to SR 893 million in the first quarter of 2022. This means that net income increased almost 39 times from quarter to quarter. other.

The rise was mainly attributed to an increase in net profit of non-real estate finance companies from SR19 million in the fourth quarter of last year to SR776 million in the first quarter of 2022.

The data provided by the Central Bank does not specify the share of the Saudi Refinance Co. However, the growth of the assets of this company stands out compared to other groups.

Compared to the first quarter of 2021, non-real estate finance companies’ net income nearly doubled to SR539 million, up 98% from SR271 million in the fourth quarter of 2020.