The automotive sector plays an important role in the Saudi economy; the highest amount of financing granted by banks to the sector was in February 2016, totaling 3.578 billion riyals, while the lowest amount granted was 1.292 billion riyals in October of the same year. The automotive financing sector accounted for “automobile” imports in the Kingdom for December 2016, accounting for approximately 15.1 percent of the total credit extended by commercial banks operating in the Saudi banking system to the private sector, with a value exceeding 1.8 billion riyals.

31.349 billion riyals in bank financing for automobile imports

Measuring the total market for “newly opened documentary credits” in the banking sector on a year-over-year basis, it recorded a decline of approximately 13 percent, meaning it lost approximately 1.838 billion riyals over the course of the year, compared to the 13.923 billion riyals recorded in December 2015.

In a related development, the banking sector contributed to financing the total “private sector’s automobile imports for 2016” amounting to approximately 31.349 billion riyals, or an average of approximately 2.612 billion riyals per month, in the form of ”newly opened documentary credits" with commercial banks.

A decline of 21% on a monthly basis

The sector recorded a decline in the value of financing granted to it during December by more than 641 million riyals, a monthly decline of approximately 26.1 percent in new documentary credits, compared to levels exceeding 2.4 billion riyals in November of the same year, which constituted approximately 21 percent of the total credit extended by commercial banks to the private sector, which stood at 11.9 billion riyals in November 2016.

An annual decline exceeding 50%

On an annual basis, financing granted to the sector decreased by approximately 1.824 billion riyals, representing a decline of nearly 50 percent, compared to 3.639 billion riyals in December 2015, which accounted for about 26.1 percent of the total newly opened documentary credits for financing private sector imports at that time.

12.1 billion riyals in total bank credits

It is worth noting that the total market for ”newly opened documentary credits“ in the Saudi banking sector reached 12.1 billion riyals in December 2016, compared to 11.9 billion riyals in November 2016, achieving an estimated monthly growth of approximately 2 percent, which equates to an increase of approximately 236 million riyals.

These credits are distributed across seven main categories, ranked ”by highest value,” as follows: other goods worth 6.6 billion riyals, automobiles worth 1.814 billion riyals, foodstuffs worth 1.269 billion riyals, construction materials worth 1.256 billion riyals, machinery worth 658 million riyals, appliances worth 306 million riyals, and finally textiles and clothing worth 186 million riyals.