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Saudi Fintech Sector Sees Unprecedented Growth

Saudi Arabia pushes digital transformation in all fields, including the fintech sector. (Asharq Al-Awsat)
Saudi Arabia pushes digital transformation in all fields, including the fintech sector. (Asharq Al-Awsat)
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Saudi Fintech Sector Sees Unprecedented Growth

Saudi Arabia pushes digital transformation in all fields, including the fintech sector. (Asharq Al-Awsat)
Saudi Arabia pushes digital transformation in all fields, including the fintech sector. (Asharq Al-Awsat)

A report by the Washington-based Saudi-American Business Council pointed to an “unprecedented” growth in the field of startup investments.

Saudi Arabia has one of the most developed financial services sectors in the Middle East and North Africa region.

The report indicated that during August 2022, the Kingdom witnessed a 79 percent year-on-year increase in the number of operating fintech firms. Of the 147 active fintech companies operating in Saudi Arabia, only 10 were operating in 2018. This rapid expansion is due to liberalized business regulations, an active investment environment, and well-developed technology infrastructure.

Meanwhile, venture capital financing in Saudi Arabia more than tripled to reach 2.2 billion Saudi riyals ($584 million) in the first half of 2022.

The Kingdom continues to invest in technology and digital transformation, ranking ninth globally in terms of the availability of investment capital, as stated in the Global Competitiveness Report 2022 issued by the International Institute for Management Development (IMD).

Albaraa Alwazir, Director of Economic Research at the US-Saudi Business Council, said that in the first half of 2022, fintech accounted for the highest number of total investment deals.

“Fintech companies attracted investments from leading domestic and international firms such as Sequoia, 500 Global, and Mastercard. Well-developed technology infrastructure such as widely accessible 5G and cloud services, a high domestic demand for financial services, and continued government support have all supported ongoing growth,” he added.

Saudi Arabia aims to reach a SAR13.3 billion ($3.6 billion) direct GDP contribution by 2030, up from SAR1.2 billion ($317 million) in 2021. The fintech sector will account for 18,200 direct jobs and reach 525 active fintech companies by 2030.

In addition to the record rise in licensed financial technology companies, the Saudi Cabinet approved the licensing of three local digital banks.

The report said that the first was the conversion of STC Pay into a digital bank with SAR2.5 billion ($667 million) in capital, while the second involves Abdul Rahman bin Saad Al-Rashed and Sons Company, which established Saudi Digital Bank with SAR1.5 billion ($400 million) in capitalization. Most recently, D360 bank was licensed and became the third digital bank operating in Saudi Arabia. The PIF joined key investors in backing D360 Bank.

“These developments will introduce advantages that will provide payments services, consumer microfinance, and insurance brokerage services without requiring a physical business,” according to the report.

It also noted that the demand for a variety of financial services among Saudi residents was particularly high, including banking, insurance, investment, asset management, and Shariah-compliant financing.

The report pointed to a steady surge in the use of card and electronic payments in Saudi Arabia since 2016, with a further acceleration due to the COVID-19 pandemic.

Saudi consumer habits have also adapted quickly to the digital economic transition. A 2022 Mastercard report found that 89 percent of people in Saudi Arabia have used at least one emerging payment method in the last year, according to the report.

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Business

Euro Zone Business Activity Growth Hits Highest Since November

PRODUCTION - 19 August 2026, North Rhine-Westphalia, Duisburg: A truck is being loaded with a forklift at the Duisport Port in Duisburg while a ship is at anchor. Photo: Bernd Thissen/dpa
PRODUCTION - 19 August 2026, North Rhine-Westphalia, Duisburg: A truck is being loaded with a forklift at the Duisport Port in Duisburg while a ship is at anchor. Photo: Bernd Thissen/dpa
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Euro Zone Business Activity Growth Hits Highest Since November

PRODUCTION - 19 August 2026, North Rhine-Westphalia, Duisburg: A truck is being loaded with a forklift at the Duisport Port in Duisburg while a ship is at anchor. Photo: Bernd Thissen/dpa
PRODUCTION - 19 August 2026, North Rhine-Westphalia, Duisburg: A truck is being loaded with a forklift at the Duisport Port in Duisburg while a ship is at anchor. Photo: Bernd Thissen/dpa

Euro zone business activity has grown at its fastest pace this year in August, buoyed by stronger new orders — particularly in manufacturing — and a return to export growth, according to a survey which also showed easing price pressures.

That suggests the economy has remained resilient this quarter despite the Middle East conflict, after expanding 0.4% in the second quarter.

The S&P Global Flash Euro zone Composite PMI Output Index has risen to 52.1 this month from July's 52.0, its highest since November and above a Reuters poll expectation of 51.7. Readings above 50 indicate growth.

Final data have come out better than initial flash readings for the past five months.

New orders, a key gauge of demand, have risen at their fastest rate in 40 months, while ⁠export orders, including intra-euro ⁠zone trade, have increased for the first time since Russia invaded Ukraine in February 2022.

“The manufacturing sector is again the star performer ... with the services economy providing a supporting role, notching up another month of decent growth after the malaise seen in the second quarter," said Chris Williamson, chief business economist at S&P Global Market Intelligence.

"We are again seeing reports of precautionary stock building helping support ⁠the goods-producing sector amid the ongoing supply chain disruptions emanating out of the Middle East ... However, there are also encouraging signs of rising demand for AI-related tech goods and rising equipment demand thanks to higher defense spending, notably helping Germany in particular achieve increasingly impressive production gains."

The factory PMI has risen to a more than four-year high of 52.8 from 51.9, beating the poll estimate of 51.8. Output growth has hit its strongest level in 54 months.

Services activity has held steady after July's rebound, with the PMI unchanged at 51.7, defying forecasts for a slowdown.

Overall employment has risen for the first time this year ⁠as manufacturers resumed ⁠hiring after more than three years, while services employment has grown at the fastest pace in eight months.

Price pressures, although still high, have continued to ease, with input cost growth at its slowest in six months and output price inflation easing to a five-month low.

"However, with the flash PMI signaling solid third-quarter GDP growth, a return to hiring by companies for the first time this year, and inflation remaining elevated by historical standards, a hawkish bias is likely to be maintained and further imminent rate hikes cannot be ruled out," Williamson added.

The European Central Bank will deliver its second rate hike of this year next month, a Reuters poll showed last week.

Despite encouraging data, firms were less optimistic about the year-ahead outlook and sentiment remained lower than the series average.

Business

Oil Set for Second Weekly Rise as Unsettled US-Iran War Crimps Supply

A fuel pump at a Rosneft gas station in Moscow, Russia, 19 August 2026. (EPA)
A fuel pump at a Rosneft gas station in Moscow, Russia, 19 August 2026. (EPA)
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Oil Set for Second Weekly Rise as Unsettled US-Iran War Crimps Supply

A fuel pump at a Rosneft gas station in Moscow, Russia, 19 August 2026. (EPA)
A fuel pump at a Rosneft gas station in Moscow, Russia, 19 August 2026. (EPA)

Oil prices fell slightly on Friday, but were on track for a second weekly rise as the stalemated US-Iran war continues to disrupt supply from the key Middle East producing region.

Brent crude futures fell 23 cents, or 0.3%, to $93.55 a barrel by 0142 GMT, after climbing 2.4% in the previous session. US West Texas Intermediate crude futures slipped 33 cents, or 0.4%, to $86.50 a barrel, after rising 2.3% in the prior session.

During the previous five days of gains, Brent gained more than 7% and WTI climbed more than 8%, ‌reaching their ‌highest since July 24.

Prices have increased on concerns ‌the ⁠inconclusive state of the US-Israeli ⁠war on Iran will mean the continued curtailment of supply from major oil producers.

The earlier peace deal between them expired this week with no effort by either side to restart talks, and US President Donald Trump threatened economic retaliation against nations supporting Iran.

"Both sides are dug in ⁠but lacking the luxury of time to play the ‌waiting game, against a backdrop ‌of crude prices grinding unerringly higher," IG analyst Tony Sycamore said on Friday.

BMI, a ‌unit of Fitch Solutions, said on Friday it will review its ‌Brent price outlook this month, adding that risks to the outlook are "tilted to the upside."

"Exports are already under considerable pressure, because of the twin disruptions in play in the Strait of Hormuz due to the Iranian shut-in ‌of the strait and the US naval blockade on Iran, and the Red Sea due to the ⁠Houthi embargo," ⁠BMI said.

Thousands of people have been killed in the Iran war, which began on February 28 when the US and Israel launched military strikes on Iran.

Seven commodity ships sailed along the Strait of Hormuz on Thursday, just half the previous day's tally, data from ship-tracker Kpler showed. Prior to the Iran war, about one-fifth of global consumption moved through the waterway.

On Wednesday evening, Trump threatened "economic warfare and isolation on an unprecedented scale" against Tehran, warning of consequences for any country that provided "any type of lifeline to Iran".

This week, the UAE suspended all financial and economic transactions with Iran until further notice, highlighting the fraught ties between the major Gulf Arab oil producer and Tehran.

Business

Saudi Listed Real Estate Firms Post $766 Million in First-Half Profit

The Saudi capital, Riyadh (SPA) 
The Saudi capital, Riyadh (SPA) 
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Saudi Listed Real Estate Firms Post $766 Million in First-Half Profit

The Saudi capital, Riyadh (SPA) 
The Saudi capital, Riyadh (SPA) 

Saudi Arabia’s listed real estate companies posted combined net profit of more than $766 million (SAR 2.87 billion) in the first half of 2026, reflecting a resilient performance despite an 18% decline from the same period last year.

The results were supported by higher property sales, faster project execution and more diversified revenue streams. Fourteen companies reported net profits, while only three posted losses.

Experts and analysts see the market undergoing a regulatory and structural transformation centered on transparency, governance and increasingly differentiated business models, potentially paving the way for selective improvement among the most operationally and financially efficient companies in the second half.

Cenomi Centers led the sector with first-half profit of SAR 588.2 million, down 14.7% year on year. Al Akaria ranked second with about SAR 579 million, a 152.2% surge, while Dar Al Arkan placed third with SAR 498.97 million, up 11.4%.

In the second quarter, combined sector profit slipped just 0.49% to SAR 1.455 billion from SAR 1.462 billion a year earlier.

Project Deliveries

Khaled Almobid, CEO of Menassat Realty Co., told Asharq Al-Awsat that disparities in companies’ financial results were natural because the sector encompasses different business models. Some companies rely on development and sales, others on leasing and recurring income, while some are tied to major projects, specific seasons or destinations.

A company could therefore record a sharp profit increase following project deliveries, asset sales or improved margins, while another could see earnings decline despite maintaining strong operating activity, he explained.

Almobid noted that Al Akaria’s profit surge and Dar Al Arkan’s growth reflected some developers’ ability to capitalize on projects, sales and accumulated demand. Cenomi Centers’ lower earnings, meanwhile, did not necessarily signal weakness in the broader property market, with each company’s performance needing to be assessed according to its business model, revenue sources and financing structure.

Market Reshaping

According to Almobid, new regulations are reshaping the sector by raising professional and transparency standards and encouraging the development and productive use of assets rather than land hoarding.

Financing costs nevertheless remain a major factor because they affect project expenses and the ability of individuals and investors to buy property, influencing sales momentum and profit margins.

He expects selective earnings improvement over the next two quarters rather than uniform growth across the sector. The second quarter’s decline of less than 0.5%, compared with an almost 18% drop for the full first half, could be an early indication that the pace of deterioration is easing.

Companies best positioned to benefit will be those with projects nearing completion, land acquired at favorable costs, disciplined debt levels and strong operating cash flow. The second half could therefore prove stronger for some companies, although Almobid cautioned that it was too early to expect a broad, synchronized profit upcycle.

The next phase, he added, will increasingly differentiate companies: the winners will not necessarily be those with the largest property portfolios, but those most capable of converting their assets into sustainable cash flow and profits.

Regulatory Changes

Real estate expert and appraiser Ahmed Al-Faqih told Asharq Al-Awsat that quarterly and half-year results were more indicative of individual listed developers’ project deliveries and management performance than of the direction of the broader development market.

Sweeping regulatory and legislative changes, particularly governance requirements for developers, are affecting the market, but their impact is unlikely to be fully reflected in major developers’ earnings for about another 12 months.

While some new governance requirements have increased development costs, Al-Faqih noted that real estate balance measures have helped reduce one of developers’ biggest expenses: land. Partnerships with landowners have made this key component more accessible, significantly lowering actual costs.

He concluded that developers’ profitability ultimately depends largely on two factors: their ability to deliver and sell projects without delays, and effective management capable of avoiding major mistakes. Large-scale development projects and regulatory changes are also creating an increasingly competitive environment for Saudi real estate companies.