Photo: A Saudi woman sits in a car during a driving training at a university in Jeddah, Saudi Arabia March 7, 2018. REUTERS/Faisal Al Nasser
21/03/2018 17:28 | DUBAI
As Saudi women get the right to drive and have more chances to work, increased economic activity among an entire half of the population is an opportunity for banks, the head of one of them said.
Al Rajhi Bank <1120.SE>, Saudi Arabia's second largest by assets, has opened 133 female-only branches and even has a car showroom for women to help them access car loans, CEO Steve Bertamini told Reuters in an interview.
Marking a move away from the strictures of the Wahhabi brand of Sunni Islam, women have been allowed to attend mixed sporting events and will be able to drive from June.
The author of the reforms, Crown Prince Mohammed bin Salman, also wants to increase the proportion of Saudi women in work from the current roughly 10 percent of the labour force, as he aims to diversify the economy away from a reliance on oil.
"Women entering the workforce will be positive from a household perspective in terms of extra income to help offset some of the increase cost you see elsewhere," Bertamini said, referring to reduction in consumer spending expected from the introduction of Value Added Tax this year and the removal of some subsidies.
As Saudi Arabia's largest consumer lender, Al Rajhi is a major provider of vehicle loans and has operated car showrooms since 2008. But they were only for men until the bank opened its first women-only one late last year.
"The types and models of cars tend to be different. It's a really big learning curve in the market to adapt," said Munich-born Bertamini, who joined Al Rajhi from Standard Chartered in 2015.
"Usually the family has a large automobile already, so these tend to be smaller vehicles for commuting."
A showroom, run by one of the bank's partners, offering viewings for women had 75 bookings in its first week, Bertamini said.
The bank will provide extended hours for women within existing car showrooms and increase the number of female bank branches in 2018, he said.
Women's increased economic activity will help the bank's loan growth outperform the 4 percent expected for the sector in 2018, Bertamini said. Its loan growth was 3 percent last year.
HOUSING AND FOREIGN INFLOWS
The government's bid to raise the percentage of Saudis owning their own homes - from around half now to 70 percent by 2030, is another reform Al Rajhi expects to present opportunities.
Al Rajhi is Saudi Arabia's biggest mortgage provider, with around 44 percent of total mortgages last year.
"There's roughly 200 billion riyals of housing out there and the government is looking to increase that to 500 billion by 2050, which implies big opportunities for the industry," Bertamini said.
Al Rajhi has been one of the main beneficiaries of an inflow of foreign investment into the Saudi bourse in 2018 in anticipation of the country's possible inclusion in the MSCI and FTSE emerging market indexes.
"We captured 40 to 50 percent of this inflow, which shows the confidence in the market in general and the banking sector in particular" Bertamini said.
"I expect inflows to remain healthy for rest of 2018."
He said the inflows signalled that foreign investors were not unduly concerned about a purge of senior officials and business people who were detained for months.
(Reporting By Tom Arnold; Editing by Robin Pomeroy)
© Thomson Reuters 2018 All rights reserved