Experts call for better use of bank cash assets

(MENAFN- Arab News) A group of financial experts have called for better use of the accumulated cash assets of local Saudi banks the media said.

Cash assets of local banks reportedly grew by 73.1 percent to SR4.24 trillion ($1.13 trillion) by the end of last August compared to SR2.46 trillion in August 2009 according to data released by the Saudi Arabian Monetary Agency (SAMA).

The cash growth in Saudi banks reflects the decrease of lending in the said period whereas the inflated real estate prices have also minimized demand for property loans experts told Asharq Al-Awsat newspaper.

Experts said the Kingdom maintains a variety of options to take advantage of increased cash assets in the banks on one hand and avoid growing rates of inflation on the other. For its part SAMA has begun taking a series of new measures in order to improve lending and funding systems the paper said.

The greater the increase of cash assets the more the inflation and the higher the commodity prices Fadhl Abu Ainain financial and banking expert said.

He called on the Ministry of Finance and SAMA to seriously tackle the issue of increased cash assets in the face of inflation and to find better ways of benefiting from accumulated cash assets in order to promote more development in the country.

For his part financial expert Fahad Al-Mishari said the property fund portfolio in Saudi banks had witnessed a remarkable drop since the end of 2011. The inflated real estate prices and the Ministry of Housing's plans to allow citizens to own housing units were the major reasons for decline in property lending rates during the past two years he said.

According to another SAMA report issued earlier this year the volume of deposits in the local banks grew to SR1.29 trillion ($344 billion) in Q1 of 2013 but deposits in hard currency dropped by 4.6 percent to SR7.4 billion ($1.9 billion) in the same period the paper said.