Financial Services

OVERVIEW

Saudi Arabia is home to one of the most developed, liquid, sound, well-capitalized, and efficient financial services sectors in the world. As a key enabler of Vision 2030’s ambitions, the sector is expected to play an even greater role to support the development of the national economy, diversify its sources of income, provide different sources of financing, attract foreign capital, stimulate savings and investments. The government is actively supporting financial institutions to enable public and private sector growth, develop an advanced capital market, and increase funding to micro, small and medium enterprises (MSMEs).

Value Proposition

value

Commercial and Digital Banking supporting a variety of projects and services

Commercial and Digital banks in Saudi Arabia have the opportunity to finance and capitalize giga projects through debt capital injection, re-financing, and other corporate and treasury solutions.
Diversification of financial products and instruments to provide suitable solutions, while increasing market liquidity through debt financing services.
Saudi commercial banks are expected to play a significant role in the diversification and inclusivity of the financial services sector by adopting and developing new digital banking solutions.

Investment banks ensuring debt and equity securities

Investment banking opportunities in Saudi Arabia are rapidly expanding due to high market demand, as Saudi Arabia’s Vision 2030 projects grow their investment banking needs, including fund and asset management.
M&As and IPOs deals are growing fast in terms of number and size of transactions, making the Kingdom the leading market in the region.
Debt structuring/re-structuring deals and financial custody services are also in high demand and growing on year-to-year basis.

Financing companies taking on a greater role in the sector

The Kingdom is aiming to increase the financing options available for small and medium projects by addressing the main challenges facing financing companies and enabling them to better compete with commercial banks.

Insurance is a financial institution that assuring the businesses/ individuals in multiple industries

As more greenfield opportunities are created as we are achieving Vision 2030, the insurance sector is having more demand than ever.
There are couple of initiatives currently that aim to increase the ease of doing business in KSA including lowering in licensing requirements and having one body as a regulator which will make the sector policies clearer.
Enforcing health insurance for small/medium sized companies which currently has low current coverage ratio.
Assuming mandatory motor insurance covers all vehicles in KSA.

MSME financing to support entrepreneurship and innovation

In line with its Vision 2030 target of increasing MSME’s contribution to GDP from 20% to 35% by 2030, the government is launching several initiatives to support the MSME financing ecosystem.
Enabling banks to increase their lending to MSMEs through improvements to the existing financial system and through financing incentives for small and medium projects.

Funds backing the realization of mega and giga projects

Funds, including sovereign wealth funds, infrastructure investment funds, and private equity funds, are given high priority as they invest directly in greenfield projects, a key component of Vision 2030, in addition to their support for brownfield opportunities.

A globally leading capital market welcoming foreign investors

The Saudi Exchange (Tadawul), the largest stock exchange in the region, is now open to foreign investors, with a 49% cap on foreign ownership, potentially increasing to 100% for strategic investors.
The Saudi Exchange has successfully joined global indices, including MSCI, S&P’s Dow Jones, and FTSE Russell.
Several financial products are available in Saudi capital markets such as tradable funds, bonds, sukuks. The Derivative Market was also launched in 2020.

Financial Services