RIYADH — Samba Financial Group, Saudi Arabia's third-largest bank by assets, expects Saudi banks to see double-digit asset growth by early 2020, supported by government plans to diversify its oil-based economy, its chief executive told Reuters.

Riyadh plans to increase state spending to an all-time high of SR1.11 trillion ($295 billion) this year, from SR1.03 trillion in 2018, in an effort to spur economic growth.

"The government announced a number of transformational projects in entertainment, tourism, housing, and small and medium enterprises (SMEs). All these initiatives will add multi-billion dollars to Samba and the banking industry," Rania Nashar said in the interview.

"We believe that credit uptake will be moving up sharply and we could see double-digit asset growth, if not by the end of this year then by early 2020," she added.

Nashar, who in 2017 became the first female CEO of a listed Saudi commercial bank, expects loan growth to pick up in the third quarter.

Samba, which reported a 10 percent rise in 2018 net profit and which ranks behind National Commercial Bank (NCB) and Al Rajhi among Saudi banks by total assets, will increase consumer lending to tap opportunities in mortgage and SME finance, Nashar said.

She also said the bank is looking into opportunities to issue bonds.

Regarding consolidation in the Saudi banking sector, Nashar said Samba is not actively evaluating any proposals to merge with other banks. — Reuters