The first-quarter 2026 net profit of Saudi-listed banks rose 8% year-on-year (YoY) to 24 billion Saudi riyals ($6.4 billion), beating consensus by 3%, Alrajhi Capital said in a new report.

Earnings growth was driven by strong performance from Al Rajhi Bank, Saudi National Bank (SNB), and Bank Albilad, despite the Iran war, which began on February 28.

Funded income rose 8% YoY, while provisions fell 38%, playing a major role in driving bottom-line growth. 

However, non-funded income declined 3% YoY due to adverse regulatory moves related to fees & commission, as well as weaker operating conditions for non-banking businesses.

Deposits increased 9% YoY and 4% quarter-on-quarter (QoQ), outpacing credit growth (8% YoY and 2% QoQ) for the first time in two years. 

A combination of strong deposit inflows from the government and relatively subdued credit demand pushed the loan-to-deposit ratio lower, the report said. 

Accordingly, net interest margins (NIMs) remained steady QoQ, supported by weaker pricing competition. 

Most banks reiterated their guidance, except Al Rajhi Bank, which revised its NIM guidance upwards, Alrajhi Capital stated.

(Editing by Seban Scaria seban.scaria@lseg.com)