Jul 06 2011 |
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Saudi banks urged to resume normal lending
Slow credit boosts deposits with banks to record high level
The risk averse environment of 2010 prompted the country's 12 commercial banks to maintain favorable liquidity positions moving into 2011, National Commercial Bank (NCB) said in a study sent to Emirates 24/7.
Deposits expanded by 11 per cent in the first quarter of 2011 on an annual basis to reach an all time high of SR1072.5 billion ($286 billion) while loans only grew by 3.4 per cent over the same period to reach SR763.5 billion ($204 billion).
"The highly liquid stance of the banking industry in the Kingdom surely provides ample lending opportunities that are yet to be grasped.....as Saudi banks weathered the aftermath of the financial crisis, this marks the second year of a still highly liquid state," NCB said.
However, the report added, the May monetary data, released by SAMA, showed that the L/D ratio increased to 73.2 per cent. "This suggests that banks are gradually easing their lending criteria and eying new opportunities."
© Emirates 24|7 2011
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