Corporate lending pushes Saudi bank loans past $800bn for the first time 

Updated 7 sec ago

Dayan Abou Tine

March 02, 2026 11:52

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RIYADH: Saudi bank loans surpassed the SR3 trillion ($801.6 billion) mark for the first time in January, registering a 14.66 percent year-on-year increase. 

According to figures from the Saudi Central Bank, also known as SAMA, this growth marks the fastest expansion since October 2022 and is primarily driven by a surge in business financing.

Corporate loans grew 18.5 percent over the past year, outpacing the 10.5 percent rise in retail lending. As a result, corporate credit now accounts for 54.09 percent of total bank lending, up from 52.34 percent in 2024. 

Among business sectors, real estate activities continued to command the largest share of corporate loans, making up 21.13 percent of total business lending in January. Loans to this sector surged 30.57 percent year-on-year to SR343.6 billion. 

The strong demand for real estate financing aligns with the sector’s growing role in the Saudi economy.  

According to the General Authority for Statistics, real gross domestic product from real estate activities reached SR176.18 billion in the first nine months of 2024, accounting for around 7 percent of gross value added.

This marks an increase from SR172 billion in the same period last year, highlighting the sector’s expanding contribution to economic output.   

The wholesale and retail trade sector followed, with credit facilities totaling SR204 billion, or 12.54 percent of total corporate loans. Meanwhile, manufacturing accounted for 11.7 percent, with loans rising to SR190.2 billion.  

While professional, scientific, and technical activities hold a smaller share of total corporate lending at 0.52 percent, they recorded the highest annual growth rate, soaring 34.2 percent to SR8.38 billion. 

Similarly, education loans saw a 33.17 percent increase to SR8.43 billion, while financing for financial and insurance activities grew 32.06 percent to SR137.62 billion.    

Real estate boom  

The real estate boom has been a key driver of credit expansion, fueled by population growth, rapid urbanization, government-backed initiatives such as the Sakani housing program, and large-scale developments like NEOM, ROSHN, and Diriyah Gate. 

The surge in demand for housing and commercial properties has led to increased borrowing by developers and investors looking to capitalize on the sector’s momentum.  

Meanwhile, wholesale and retail trade have benefited from rising consumer spending, an expanding middle class, and the rapid growth of e-commerce, which has driven investment in logistics, supply chains, and retail infrastructure.  

Government efforts to boost domestic manufacturing and reduce import dependency have also strengthened lending to the industrial sector, particularly in pharmaceuticals, automotive production, and food processing. Incentives and subsidies have further supported local production.  

The professional, scientific, and technical services sector has seen robust credit growth as businesses and government projects accelerate digital transformation and infrastructure development, increasing demand for engineering, consultancy, and IT services.  

Similarly, the education sector has experienced significant lending expansion, driven by private sector investment in schools, universities, and vocational training centers as part of the Kingdom’s push to develop human capital and align workforce skills with evolving job market demands.  

Financial and insurance activities have also emerged as a key growth area, with lending surging due to the expansion of fintech startups, digital banking, and capital market activity. The rise of investment funds, initial public offerings, and sukuk issuances has created new financing opportunities, reflecting Saudi Arabia’s ambition to position itself as a regional financial hub.   ‘

Affordability challenges 

The Kingdom’s commercial real estate market is grappling with affordability challenges as strong demand and rapid economic expansion push prices higher. 

The rise in business activity, foreign investment, and large-scale infrastructure projects has intensified competition for prime commercial spaces, particularly in major urban centers like Riyadh and Jeddah.  

As Saudi Arabia continues to position itself as a global business hub, companies are facing mounting pressure to secure office and retail spaces at rising costs. 

Recent data from the GASTAT showed that commercial real estate prices rose 5 percent year-on-year in the fourth quarter of 2024, driven primarily by a 5.2 percent increase in commercial land plot prices and a 5.1 percent rise in building costs.   

The Real Estate Price Index, a key measure of property price movements, recorded an overall 3.6 percent annual increase in the fourth quarter.

While residential real estate had the largest impact on the index due to its higher weighting, commercial real estate prices saw sharper increases in specific subcategories, highlighting the growing cost burden on businesses.   

Several factors are driving this sustained rise in commercial real estate prices. The Kingdom’s Vision 2030 initiatives, focusing on economic diversification and attracting multinational corporations, have significantly boosted demand for office spaces and commercial land.  

Saudi Arabia’s Regional Headquarters Program, designed to encourage global firms to establish regional offices in the country, has further fueled demand in key business districts, particularly in Riyadh, where commercial real estate prices jumped 10.2 percent.  

Initiatives such as NEOM, Diriyah Gate, and Qiddiya have also contributed to rising property values as businesses seek to position themselves near these emerging economic zones.  

At the same time, the supply of prime commercial properties remains relatively constrained, adding further pressure on prices. 

While the influx of international businesses has strengthened market dynamics, it has also made affordability a growing concern, particularly for small and medium enterprises.   

Despite these challenges, Saudi Arabia remains one of the region’s most attractive commercial real estate markets, supported by strong economic growth, government incentives, and an expanding business ecosystem.  

However, ensuring that commercial spaces remain accessible to a broad range of businesses may require policy adjustments, such as increasing the supply of office spaces, revising zoning regulations, or offering incentives to support SMEs.  

As demand for commercial real estate rises, balancing growth with affordability will be crucial in sustaining the Kingdom’s economic momentum.