According to a financial analyst, the Saudi banking sector is expected to experience a 9% annual growth in earnings in the second quarter of 2024.
Hussein Al-Attas expressed confidence in the upcoming performance of the banking division in an interview with Al Ekhbariya, and he also predicted significant improvements for the petrochemical industry.
Additionally, he mentioned that consulting firms have a positive outlook for the second quarter’s results, particularly in the banking, communication, and retail sectors.
Despite widespread optimism for the three sectors, there are conflicting opinions about the cement and petrochemical fields’ performance.
The analyst stated that, despite differing views, the sector is expected to have improved performance in the second quarter compared to the same period last year, albeit slightly less than the first three months of this year.
He attributed this slower growth to the fact that many companies underwent periodic maintenance closures in the first quarter, impacting their performance.
Plans for revenue diversification give banks in Saudi Arabia, one of the economies with the fastest rate of growth in the world, the chance to participate in reasonably low-risk public and private sector initiatives.
The private sector, which accounts for almost 90% of all bank assets, is still growing as a result of the robust economy, rising oil prices, and continuous government assistance, all of which are factors in the anticipated rise in bank asset bases.
According to the International Trade Administration, the Kingdom is also one of the top manufacturers of petrochemicals worldwide, contributing about 7% of the world market.
The sector has expanded significantly, securing the country’s position as the main exporter of petrochemical resources.
Nevertheless, the industry faces difficulties, such as a shaky demand rebound amid high interest rates and shaky macroeconomic fundamentals, increased transportation costs and logistical difficulties due to persistent Red Sea problems, and demand-related seasonal factors.
Al-Attas said that significant gains would be expected for businesses like Yansab, Advanced, and SABIC, which saw higher sales volumes and finished their first-quarter maintenance.
In the second quarter, these businesses were almost entirely operational, according to the analyst. Moreover, despite erratic global demand brought on by geopolitical concerns, several petrochemical products have improved.
As per the prediction research by Al-Jazira Capital, there is an anticipated 95% gain in profitability for the industry in comparison to the previous quarter which had several plant shutdowns. Leading this growth is expected to be SABIC, which will gain from volume recoveries after the turnarounds in the first quarter.
Furthermore, it is projected that Tasnee and Advanced will produce a profit throughout this time frame, adding to the sector’s total revenue.