Net loans at Saudi Arabia’s 10 listed banks increased by 7 percent year on year, reaching SR3.25 trillion ($865.2 billion) by the end of the second quarter of 2026, according to a recent analysis by Al Rajhi Capital. During the same period, deposits grew by 9 percent to SR3.15 trillion, with deposit growth outpacing loan expansion for the second consecutive quarter.

Loan volumes rose modestly by 2 percent from the first quarter, while deposits expanded by 3 percent in the same timeframe. The aggregate loan-to-deposit ratio stood at 103 percent, reflecting a slight tightening in the sector’s liquidity position.

The report noted a strategic shift among some of the Kingdom’s largest banks, which have moderated their loan growth forecasts for 2026 to prioritize profitability and returns over expanding lending volumes. Al Rajhi Capital highlighted that top lenders, including Al Rajhi Bank, Saudi National Bank (SNB), and Riyad Bank, lowered their loan-growth guidance this year.

Specifically, Al Rajhi Bank revised its forecast to low single-digit growth, down from low- to mid-single digits. SNB adjusted its outlook to mid-single-digit growth from a previous high single-digit forecast, while Riyad Bank anticipates mid- to high-single-digit loan growth, driven by an increase in its loan book of SR33.42 billion. Meanwhile, Saudi Awwal Bank posted a 13 percent increase in net loans to SR320.21 billion.

The analysis differentiated between corporate- and retail-focused lenders, with corporate banks showing stronger loan growth of 10 percent annually compared to 4 percent among retail banks. Deposit growth was also higher among corporate-oriented lenders at 11 percent versus 7 percent for retail-focused institutions.

Among other banks, Alinma Bank reported a 12 percent rise in loans, followed by Arab National Bank at 10 percent and Saudi Investment Bank at 8 percent. Riyad Bank and Banque Saudi Fransi each recorded 7 percent loan growth. Al Rajhi Bank and Saudi National Bank continue to lead in loan portfolios, with SR762.10 billion and SR738.56 billion in net loans respectively, each growing by 3 percent over the year.

Despite the slower lending growth, the sector’s net interest margin improved by five basis points year on year, reaching 2.96 percent. This contributed to an 8 percent increase in net funded income to SR32.6 billion.

Separately, data from the Saudi Central Bank showed that bank credit across the system rose 7.3 percent year on year to SR3.42 trillion in June, while deposits grew 8.9 percent to SR3.15 trillion. However, the central bank’s figures cover a broader scope than the net loans at listed banks reported by Al Rajhi Capital, and thus are not directly comparable.