Saudi Arabia Banking & Financial Services Report Q4 2017
We hold a positive outlook for Saudi Arabia's financial services sector over the next ten years.The sector presents a number of opportunities to banks and investment companies looking to expand theiroperations and tap into the second largest consumer market in the Middle East (after Egypt). Analysis ofrecent activity shows many large corporations seeking to take advantage of the country's ambitiouseconomic reform agenda, which involves high levels of government spending and regulatory reform. Thatsaid, we remain wary of subdued oil prices, which weigh heavily on the government's budget andconsequently on its long-term spending ability. We believe that in the long term, the government may beforced into expenditure cuts, which will reduce demand for investment advisory services. There is alsopotential for a decline in demand for consumer products in the commercial banking and insurance sector,as deterioration of the macroeconomic environment weighs on purchasing power.