By Majid Al-Shabib
Riyadh – Mubasher: Saudi Arabia’s banks are expected to raise lending interest rates in the coming period, said Said Al-Sheikh, chief economist at National Commercial Bank (NCB).
Speaking to Mubasher, Al-Sheikh added that SIBOR, the key interbank rate in Saudi Arabia, would continue to rise gradually to 2.3% as a minimum till the end of this year.
SIBOR rose to 1.77%, from 0.7% in early 2015, thus recording its highest level since 2009.
Al-Sheikh pointed out that the current and expected rise in SIBOR comes in light of lower government spending, which would be coupled with slower pace of deposit growth.
The economist also indicated that there is a slower pace of growth in earnings of Saudi banks.
“Despite the current economic conditions, the expected growth [in banks’ earnings] would be still strong,” said Al-Sheikh, “The banking sector’s assets are still growing and not declining”.
