Regulatory Alerts2018-03-13
Guidelines for Calculating Loan to Deposit Ratio (LDR)
The Saudi Arabian Monetary Authority (SAMA) has issued updated guidelines to calculate the Loan to Deposit Ratio (LDR), introducing higher weightings for long-term deposits to incentivize savings product creation. The revised methodology applies to both solo and consolidated entities, utilizing a formula that caps the LDR at 90% while granting additional lending headroom based on weighted deposits. Effective April 1, 2018, banks must disclose these calculations monthly in their existing regulatory returns, with maturity mismatches reviewed on a case-by-case basis.
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