Saudi’s Samba CEO sees U-shaped recovery after ‘triple jeopardy’

Samba Financial Group expects the kingdom’s economy to have a slow U-shaped recovery after being hit by the “triple jeopardy” of low oil prices, reduced interest rates and the coronavirus pandemic.

Recovery from the coronavirus shutdown is already underway, and “we see a full recovery toward the end of 2021,” chief executive officer Rania Nashar said in an interview with Bloomberg TV on Thursday.

In response to the crisis, Samba booked higher provisions in the first quarter to “build our reserves so we’re ready for any surprises” later in the year, she said.

The bank is also reviewing SMEs to see if more stimulus measures are needed from the Saudi regulator.

The kingdom this month unveiled a second $13.3bn stimulus package to protect lenders against an expected drop in profits and rise in bad loans.

The move by the central bank was aimed at helping lenders amend and restructure loans, without additional fees, and support private sector employment and credit.

It followed a SAR50bn ($13.3bn) programme in March to help banks provide loans to businesses so companies didn’t have to cut jobs.