Saudi central bank governor says does not see more bank mergers

Data released last week showed that Saudi Arabia’s annual consumer price index fell 1.9% in January from a year earlier. (AFP pic)

RIYADH: Saudi Arabia’s central bank does not see more bank mergers for the time being beyond those already announced, its governor Ahmed al-Kholifey said on Sunday.

His comments came after National Commercial Bank, the kingdom’s biggest lender by assets, and Riyad Bank said in December they had begun preliminary talks to potentially create a combined group with US$183 billion in assets.

That move came two months after Saudi British Bank (SABB) and smaller rival Alawwal Bank agreed a binding deal to create Saudi Arabia’s third-biggest lender in the first major tie-up for the country’s banking sector in recent times.

Kholifey also told reporters he does not expect deflation in Saudi Arabia thanks to consumer demand and real estate loans. He said liquidity was strong.

“I don’t think there will be any deflation, all data reflect optimism, we will soon publish real estate financing and you will see a big leap, and as you know real estate is one of the main drivers, as for the consumer sector it is active,” he said.

Data released last week showed that Saudi Arabia’s annual consumer price index fell 1.9% in January from a year earlier as housing, water and energy prices all dropped.

This was the first fall in prices in Middle East’s biggest economy since 2017. Prices had continued to rise throughout 2018 after the introduction of a value-added tax.