In 2010, the combined profit of the Saudi banking sector was $7.1bn. Although indicating a modest recovery, up 1.7 per cent on the previous year, it is still a disappointing performance.

Bankers in the kingdom have said for the past few years that provisioning was coming to an end and loan growth was about to start picking up. So far it has not happened, but there are signs things are finally improving.

That will be a relief for shareholders. Overall the banking sector is making less profit now than it did in 2007, mainly because of the provisioning for bad loans eating into profitability. Banks are actually making more in terms of operating income than in 2007, but have to set large portions of that aside to sort out the problems coming from loans made during the boom times.

So far this year, the figures indicate that provisioning has peaked and is now on the way back down. That should help the banks start to look a lot more profitable than they do now. But do not expect to see credit growth start to accelerate.

Banks are still wary about new loans and, rather than gradually open the taps again, the strategy has been to try and take as large a chunk as possible of the best assets around and ignore everything else.

For good-quality borrowers, that means they are getting a great deal on new loans. For everyone else, getting any new credit is difficult. While the government is driving investment spending in the kingdom, demand for loans is also low.

That means that even as the health of the banking sector improves, credit growth will remain muted.