3 Drivers Pushing Saudi Banks’ Capital Adequacy to Record Levels
3 Drivers Raising Saudi Banks’ Capital Adequacy to Record Levels
Saudi listed banks strengthened their financial resilience during the first half of 2026. The average total capital adequacy ratio (Tier 1 and Tier 2) rose to 20.27%, compared with 19.43% in H1 2025, an increase of 83 basis points.
These levels provide the banking sector with a strong capital buffer, allowing it to finance strategic projects under Saudi Vision 2030 without compromising financial stability or regulatory soundness.
Three Key Drivers of Capital Adequacy Growth
1. Growth in shareholders’ equity (Tier 1 capital)
Shareholders’ equity increased by 10.6% to SAR 754.6 billion, compared with SAR 682.3 billion in H1 2025, strengthening the capital base against growth in risk-weighted assets.
2. Growth in Additional Tier 1 (AT1) Sukuk
Banks expanded their issuance of AT1 instruments, with total outstanding AT1 Sukuk increasing 21.5% to SAR 129.4 billion, compared with SAR 106.5 billion in H1 2025.
- Arab National Bank recorded the highest growth in AT1 Sukuk issuance, rising 176.6% to SAR 9.3 billion.
- Al Rajhi Bank and Saudi National Bank continued to hold the largest balances, at SAR 31.7 billion and SAR 23.2 billion, respectively.
3. Growth in retained earnings
The sector’s net profit increased 8.1% to SAR 48.9 billion, compared with SAR 45.2 billion in H1 2025. This supported reserves and the organic accumulation of Common Equity Tier 1 (CET1) capital.
Saudi Banks Ranked by Capital Adequacy – H1 2026
Bank | H1 2026 | H1 2025 | Change |
|---|---|---|---|
Al Rajhi Bank | 23.53% | 20.16% | +3.37% |
Saudi National Bank | 22.00% | 20.60% | +1.40% |
Banque Saudi Fransi | 20.85% | 20.99% | -0.14% |
Arab National Bank | 20.81% | 20.11% | +0.70% |
Saudi Investment Bank | 20.24% | 19.34% | +0.90% |
Alinma Bank | 20.00% | 18.00% | +2.00% |
Riyad Bank | 19.40% | 16.90% | +2.50% |
Bank Aljazira | 19.19% | 17.91% | +1.28% |
Saudi Awwal Bank | 18.73% | 19.56% | -0.83% |
Bank Albilad | 17.91% | 20.74% | -2.83% |
Average | 20.27% | 19.43% | +0.83% |
Key Financial Indicators – H1 2026
- Net profit: SAR 48.86 billion, up 8.1%
- Total assets: SAR 4.81 trillion, up 6.5%
- Total shareholders’ equity: SAR 754.6 billion, up 10.6%
- Total liabilities: SAR 4.06 trillion, up 5.8%
- Equity / Assets: 15.7%, compared with 15.1%
- ROA: 1.02%
- ROE: 6.5%
Conclusion
Saudi banks demonstrated strong financial solvency, with an average capital adequacy ratio of 20.27%, providing a substantial buffer against economic shocks.
The 21.5% growth in AT1 Sukuk helped diversify capital sources and strengthen banks’ capital structures, while rising profits supported organic growth in CET1 capital.
Overall, these strong capital ratios enhance Saudi banks’ ability to expand lending and support major corporate and Vision 2030-related projects while maintaining financial stability.