Saudi Arabia's Commercial Banks Experience Surge in Foreign Assets

In February, Saudi Arabia's commercial banks experienced a significant increase in their foreign assets, rising by 22% to reach SR347.63 billion ($92.7 billion) compared to the previous year. This surge, as reported by the Saudi Arabian Monetary Authority (SAMA), highlights a substantial growth in the banks' international holdings and investments. However, there was also a notable 38% increase in foreign liabilities, totaling SR288.22 billion during the same period. This led to a calculation of net foreign assets amounting to SR59.41 billion, reflecting a 21% decrease from the previous year's figure of SR75 billion.

On the other hand, SAMA reported that its net foreign assets reached SR1.55 trillion in February, showcasing the overall financial strength and global position of the Kingdom's banking sector. Despite this, there was a 5% decline compared to the same month in the previous year. Central banks' foreign holdings primarily serve reserve management and monetary policy purposes, while commercial banks' foreign assets are utilized for business operations, customer services, and investment activities.

The total reserve holdings amounted to SR1.62 trillion, indicating a 5% decrease from the previous year. These reserve assets include monetary gold, Special Drawing Rights allocated by the IMF, and reserve positions in the IMF, which provide stability and liquidity to meet short-term financial obligations. Additionally, banks hold foreign currency and deposits in international institutes to fulfill obligations denominated in other currencies.

In conclusion, the surge in foreign assets and liabilities of Saudi Arabia's commercial banks reflects a dynamic growth in their international presence and investments, despite a slight decline in net figures. The overall financial strength of the Kingdom's banking sector remains robust, supported by diverse reserve assets and strategic international holdings.