Key Insights• The Saudi Arabia retail banking market operates within a financial system supervised by the Saudi Central Bank (SAMA), encompassing 39 licensed banks, including 15 local banks, 24 foreign bank branches, and four digital banks. The sector serves a population of approximately 35 million through a network of 1,910 bank branches as of year-end 2025. The market is characterised by a strong Islamic banking presence, rapid digitalisation, and alignment with Saudi Vision 2030 objectives.• The scale of Saudi Arabia's banking system is reflected in its deposit and credit base. Total bank deposits reached SAR 2,897.8 billion in October 2025, growing 7.0% year-on-year. Total bank credit expanded by 11.5% in 2025, with retail loans exceeding SAR 1.4 trillion, growing 5.17% year-on-year and adding SAR 70.48 billion. The banking system maintained strong profitability, with net profits before zakat and taxes reaching SAR 103.36 billion at the end of 2025, a 16% increase from SAR 89.1 billion in 2024.• Retail lending remains a core revenue driver, supported by economic activity, employment, and government housing initiatives.

Retail mortgages accounted for 76% of total real estate loans, reaching SAR 711.6 billion in Q2 2025, an 11% year-on-year increase. Consumer loans rose 4% year-on-year to SAR 469.8 billion during the same period. New residential mortgage originations declined 11.7% year-on-year to SAR 80.4 billion in 2025, with the total number of contracts falling 11.0%.• Digital banking adoption in Saudi Arabia has accelerated significantly. Electronic payments reached 85% of total retail payment transactions in 2025, up from 79% in 2024. The number of electronic payment transactions processed through national payment systems reached approximately 14.6 billion in 2025, compared to 12.6 billion in 2024. The mada network has recorded substantial growth in card payments through point-of-sale terminals and e-commerce.• The competitive landscape is shaped by a mix of established institutions and new digital entrants.

Al Rajhi Bank reported net profit of SAR 24.79 billion in 2025, a 25.7% increase, while Saudi National Bank reported SAR 25.01 billion, an 18% increase. The sector's aggregate net income grew 16.2% in 2025. Digital banks including STC Bank, D360 Bank, and Vision Bank have commenced operations, with EZ Bank licensed in September 2025 with capital of SAR 2.5 billion.• The Saudi banking sector maintains strong asset quality, with net non-performing loans at 1.9% as of Q1 2025. Capital adequacy remains robust, with SNB reporting a capital adequacy ratio of 21.2% and a loan-to-deposit ratio of 82.5%. The IMF has commended SAMA, noting that the banking sector remains well-positioned to support economic activity and withstand shocks, with systemic risks to financial stability remaining low.Market Outlook• According to the Actual Market Research report, "Saudi Arabia Retail Banking Market Outlook, 2031," published by Actual Market Research, the Saudi Arabia retail banking market is anticipated to add to more than USD 6 Billion by 2026–31. This growth reflects sustained demand for consumer credit, continued digital transformation investments, and the ongoing evolution of payment and financial inclusion ecosystems across all retail banking segments.• The Saudi market is expected to benefit from continued economic diversification and Vision 2030 initiatives. Non-oil sector growth has been resilient, with real GDP projected at 4.5% in 2026.

The banking sector's loan growth forecast has been revised to 7.8% year-on-year for 2026, with provisioning costs expected to drift modestly higher as banks adopt a more conservative reserving stance.• Digital banking and fintech innovation are projected to remain structural drivers of market development. SAMA has initiated the licensing process for fintech companies to offer Open Banking services, marking a shift from the regulatory sandbox phase to formal operations. Lean Technologies became the first company granted a Major Payment Institution license by SAMA to provide Open Banking services, signaling that Open Banking has graduated from testing to fully licensed commercial activity.• Retail lending is projected to remain a primary growth driver, supported by government housing initiatives and demographic expansion. The Real Estate Finance Law, Registered Real Estate Mortgage Law, and Finance Companies Control Law provide the legal foundation for mortgage lending. SAMA has granted the Saudi Real Estate Refinance Company no-objection clearance to launch residential mortgage-backed securities in the domestic market, which is expected to boost bank liquidity and lending capacity.• The Saudi retail banking market is expected to face continued competitive pressure from digital banks and fintech platforms. SAMA has licensed multiple digital banks, including STC Bank, D360 Bank, and Vision Bank, which are expected to intensify competition in payments, deposits, and consumer lending.

The Open Banking framework mandates that banks provide standardised APIs enabling authorised third-party providers to access customer account data with explicit consent.• The market is expected to benefit from continued investment in payment modernisation and financial inclusion. SAMA has launched Google Pay through the national payment system mada, enabling users to add and manage mada cards and digital credit cards through the Google Wallet application. The number of licensed payment service companies has reached 28, reflecting the expanding ecosystem of digital payment providers.Market DynamicsDriver: Digital Transformation and Payment InnovationThe Saudi Arabia retail banking market is being fundamentally reshaped by the rapid adoption of digital banking channels and payment innovation. Electronic payments reached 85% of total retail payment transactions in 2025, up from 79% in 2024, with approximately 14.6 billion electronic payment transactions processed through national payment systems. The mada network has recorded substantial growth in card payments through point-of-sale terminals and e-commerce. SAMA has launched Google Pay through mada, enabling users to securely add and manage mada cards and digital credit cards through the Google Wallet application.

The number of licensed payment service companies has reached 28, reflecting the expanding ecosystem of digital payment providers. This shift is driving substantial investment in mobile-first platforms, AI-enabled customer service, and data analytics capabilities. Banks are also leveraging digital channels to expand product penetration, with digital banking users more likely to conduct transactions and use credit products more frequently.Challenge: Mortgage Origination Decline and Liquidity ManagementA significant challenge facing the Saudi Arabia retail banking market is the decline in new mortgage originations and the management of liquidity conditions. New residential mortgage originations declined 11.7% year-on-year to SAR 80.4 billion in 2025, with the total number of contracts falling 11.0%. The retail mortgage segment remains under pressure, with new residential mortgage originations contracting by 32% in Q2 2025 to SAR 19 billion. Bank-level disclosures reflect this weakness, with SNB reporting a 2.5% decrease in its mortgage book, Riyad Bank reporting flat mortgage growth, and Al Rajhi recording a 1.1% increase on a quarterly basis.

On the funding side, time and savings deposits have grown 15.7% year-to-date, compared with 3.7% growth in demand deposits, intensifying competition for deposits and pushing the mix of time deposits to a record high of approximately 37%. The loan-to-deposit ratio reached 106% in Q2 2025, reflecting tighter liquidity conditions.Trend: Islamic Banking Growth and Retail Sukuk InnovationThe Saudi Arabia retail banking market is experiencing a structural shift toward Islamic banking and innovative retail investment products. The Ministry of Finance launched the Retail Sukuk Initiative in October 2025, enabling citizens and residents to invest in fractional Islamic Treasury Sukuk in smaller denominations through participating banks' mobile banking apps. Abu Dhabi Islamic Bank became the first bank to join the initiative, followed by Emirates Islamic Bank, with minimum investments starting at AED 4,000. This initiative reflects the growing demand for Sharia-compliant investment products and the government's efforts to broaden the investor base and promote financial inclusion. Emirates Islamic reported record annual revenue of AED 3.9 billion in retail banking and wealth management, adding 182,000 new-to-bank customers during the year, with more than nine in 10 retail transactions now conducted digitally.Policies• The Saudi Central Bank (SAMA) is the primary regulator and supervisor of the Saudi banking sector, responsible for monetary policy, financial stability, and the regulation of financial institutions.

The IMF has commended SAMA, noting that the banking sector remains well-positioned to support economic activity and withstand shocks, with systemic risks to financial stability remaining low given robust capital and liquidity buffers.• The Open Banking Framework, mandated by SAMA, requires banks to provide standardised APIs enabling authorised third-party providers to access customer account data with explicit consent. SAMA has initiated the licensing process for fintech companies to offer Open Banking services, indicating a shift from the regulatory sandbox phase to formal operations. Lean Technologies became the first company granted a Major Payment Institution license to provide Open Banking services.• The SAMA Regulatory Sandbox allows fintechs to test products in a controlled environment before full licensing. By 2025, over 45 companies had entered the sandbox across payments, lending, insurance technology, and open banking domains. SAMA permitted four fintech startups to operate under the sandbox in February 2025, including SpireTech for open banking, The Lending Hub and Soar for peer-to-peer lending, and Ldun for MSME factoring.• The Real Estate Finance Law, Registered Real Estate Mortgage Law, and Finance Companies Control Law provide the legal foundation for mortgage lending, security creation, and the regulation of real estate finance entities. SAMA issued circulars allowing the Saudi Real Estate Refinance Company to purchase residential mortgage portfolios from real estate finance entities, and granted no-objection clearance for the launch of residential mortgage-backed securities in the domestic market.• The Guide to Financial Institutions Services Fees, effective from Q1 2026, includes reductions in certain fees and reflects SAMA's ongoing efforts to enhance the efficiency and competitiveness of banking services.

The regulatory framework also includes provisions for electronic wallets, cloud adoption, outsourcing, and cybersecurity, supporting the safe expansion of digital financial services.Segment AnalysisSaudi Arabia Retail Banking Market By Product / Service• Retail Lending: A major product segment, anchored by residential mortgages and consumer credit. Retail loans exceeded SAR 1.4 trillion at the end of 2025, growing 5.17% year-on-year and adding SAR 70.48 billion. Retail mortgages accounted for 76% of total real estate loans, reaching SAR 711.6 billion in Q2 2025, an 11% year-on-year increase. Consumer loans rose 4% year-on-year to SAR 469.8 billion during the same period. Total real estate loans provided by commercial banks increased by 7.7% during 2025, an increase of SAR 68.02 billion compared to the end of 2024.• Retail Deposit & Account Services: A major revenue pool driven by net interest income from deposit balances. Total bank deposits reached SAR 2,897.8 billion in October 2025, growing 7.0% year-on-year.

Time and savings deposits have grown 15.7% year-to-date, compared with 3.7% growth in demand deposits, pushing the mix of time deposits to a record high of approximately 37%. The loan-to-deposit ratio reached 106% in Q2 2025, reflecting tighter liquidity conditions and intensified competition for deposits.• Cards & Payment Services: A major fee and transaction income driver. Electronic payments reached 85% of total retail payment transactions in 2025, with approximately 14.6 billion electronic payment transactions processed through national payment systems. The mada network has recorded substantial growth in card payments through point-of-sale terminals and e-commerce. SAMA has launched Google Pay through mada, enabling users to add and manage mada cards and digital credit cards through the Google Wallet application. The number of licensed payment service companies has reached 28.• Wealth & Investment Services: A growing segment as Saudi banks expand advisory and investment offerings.

The banking sector's non-interest income rose 26% year-on-year, supported by higher fees, commissions, trading income, and foreign exchange gains. Retail Sukuk Initiative enables citizens and residents to invest in fractional Islamic Treasury Sukuk through participating banks' mobile banking apps. Banks are investing in digital wealth management platforms to serve the growing affluent segment.• Insurance & Other Fee-Based Services: An ancillary but growing revenue pool. Banks distribute insurance products through branch and digital channels, with bancassurance remaining a key source of fee income. The expansion of digital banking and payment platforms is creating new opportunities for insurance distribution and other fee-based services, as banks seek to diversify non-interest income and deepen customer relationships.Saudi Arabia Retail Banking Market By Channel• Online Banking: The expanding and increasingly dominant channel. Electronic payments reached 85% of total retail payment transactions in 2025, with approximately 14.6 billion electronic payment transactions processed through national payment systems.

SAMA has launched Google Pay through mada, enabling users to securely add and manage mada cards and digital credit cards through the Google Wallet application. The number of licensed payment service companies has reached 28, reflecting the expanding ecosystem of digital payment providers.• Offline Banking: Branch networks remain important for complex products, relationship banking, and customer acquisition, although their role continues to evolve. The number of bank branches in Saudi Arabia reached 1,910 at the end of 2025, compared to 1,905 at the end of 2024. Al Rajhi Bank operated 511 branches, followed by Saudi National Bank with 481 branches and Riyad Bank with 224 branches. Geographically, Riyadh had the highest number of bank branches at 580, followed by Makkah with 382 and the Eastern Province with 352. Saudi Arabia Retail Banking Market By Bank Type• National Banks: The major bank type by revenue, including Al Rajhi Bank, Saudi National Bank, Riyad Bank, Alinma Bank, Arab National Bank, Bank Albilad, Saudi Awwal Bank, Banque Saudi Fransi, Bank AlJazira, and Saudi Investment Bank. Al Rajhi Bank reported net profit of SAR 24.79 billion in 2025, a 25.7% increase, while Saudi National Bank reported SAR 25.01 billion, an 18% increase.

The sector's aggregate net income grew 16.2% in 2025. SNB Retail Banking holds a market share in retail financing of approximately 28%.• Regional Banks: A significant bank type by retail market share, comprising regional banks, cooperative banks, and specialized financial institutions. These institutions focus on serving local communities and small businesses, often with a more limited product range than the national banks. The competitive landscape among regional banks is shaped by their ability to leverage local knowledge and customer relationships while investing in digital transformation. The Central Bank's regulatory framework, including the Open Banking Framework, is enabling regional banks to access data and innovate in product design, supporting their competitiveness in the retail market.• Neobanks and Others: A growing bank type, including digital-first providers and fintech platforms. SAMA has licensed four digital banks, including STC Bank, D360 Bank, Vision Bank, and EZ Bank, which received its license in September 2025 with capital of SAR 2.5 billion.

Vision Bank received a non-objection to commence digital banking operations in September 2025. The neobanking sector is expanding, with digital-first banks gaining market share by offering lower fees, higher deposit rates, and frictionless digital onboarding. The entry of new digital-first providers and the transformation of established financial institutions into digital-first models are intensifying competition in payments, deposits, and consumer lending.Saudi Arabia Retail Banking Market Economics• Retail banking pricing in the Saudi market is significantly influenced by the Saudi Central Bank's monetary policy. SAMA lowered its repo rate by 50 basis points to 4.25% in Q4 2025, with expectations of a further 50 basis points of easing by the second half of FY 2026. The banking sector maintained strong profitability, with net profits before zakat and taxes reaching SAR 103.36 billion at the end of 2025, a 16% increase from SAR 89.1 billion in 2024. The sector's return on equity averaged approximately 16-18%.• Deposit costs remain a critical economic factor.

Total bank deposits reached SAR 2,897.8 billion in October 2025, growing 7.0% year-on-year. Time and savings deposits have grown 15.7% year-to-date, pushing the mix of time deposits to a record high of approximately 37%. Banks are competing for deposits through competitive rates, with the loan-to-deposit ratio reaching 106% in Q2 2025, reflecting tighter liquidity conditions. The sector's aggregate cost-to-income ratio stood at 38.6% in Q2 2025, compared to 39.8% in Q2 2024.• The economic value of retail banking relationships is measured in terms of deposit balances, lending volumes, fee income, and cross-sell metrics. Digital banking users are more likely to conduct transactions and use credit products more frequently, with electronic payments reaching 85% of total retail payment transactions. Banks are investing in data analytics and AI capabilities to improve customer segmentation and personalise product offerings.

The Open Banking Framework is enabling banks to access a wider range of customer data, supporting more accurate credit assessment and personalised product recommendations.• Digital bank economics are fundamentally different from traditional banks, with lower operating costs and digital-first customer acquisition strategies. The neobanking sector is gaining market share by offering competitive rates and lower fees while maintaining sustainable unit economics. The competitive pressure from these challengers is compressing margins in certain product categories, particularly deposits and simple transactions, while traditional banks retain advantages in complex products such as mortgages and wealth management.Considered in this report• Historic Year: 2020• Base year: 2025• Estimated year: 2026• Forecast year: 2031Aspects covered in this report• Retail BAnking Market with its value and forecast along with its segments• Various drivers and challenges• On-going trends and developments• Top profiled companies• Strategic recommendationBy Product / Service• Retail Lending• Retail Deposit & Account Services• Cards & Payment Services• Wealth & Investment Services• Insurance & Other Ancillary ServicesBy Channel• Online Banking• Offline BankingBy Customer Age Group• 18-28 Years• 29-44 Years• 45-59 Years• 60 Years and AboveBy Bank Type• National Banks• Regional Banks• Neobanks and Others.