The total assets of banks globally amounted to 150.8 trillion U.S. dollars. This has almost tripled in value in comparison to the beginning of the millennium, particularly bearing in mind that the financial sector had experienced a major crisis in the interim.
The financial sector of the Gulf Cooperation Council region accumulated during this time assets worth 2.3 trillion U.S. dollars for commercial banks and 573 billion non-bank institutions.
One main aspect of the financial market in Saudi Arabia is the Islamic banking sector, since the Kingdom of Saudi Arabia is a Muslim country in which Shariah law is the guideline for many rules and regulations for life and business. One main factor of the Islamic banking system is that it is basically non-interest banking as taking interests on loans is forbidden according to Islamic law. Profits for Islamic banks are generated through equity participation. This means that a borrower gives the bank a share of its profit. Further, Islamic banking differentiates itself from other conventional financial institutions by abstaining from investments in fields contrary to the Islamic morals such as business involving alcohol, pork, gambling etc.
Nearly 30 percent of the Islamic banking business in the Gulf Cooperation Council takes place in Saudi Arabia, making it an important hub for this market.
The value of traded shares amongst the 12 leading commercials banks in the traditional capital markets in Saudi Arabia about 195 billion Saudi Riyals. The National Commercial Bank alone generated almost 10 billion Saudi Riyal in the trade with shares.
Commercial Banks in Saudi Arabia generate about 70 percent of their revenue through net special commissions. Almost 60 percent of their loans are given to businesses and only 24 percent to consumers. Real estate loans, such as mortgages, are only 16 percent of this business field.
In the Arab region on average the ratio of private sector credits to total deposits is about 69 percent. Whereas in the Kingdom of Saudi Arabia the leading commercial Banks operate on a loan to deposit ratio of 86 percent.