SABB stems year-long profit slide

SABB, Saudi Arabia's fifth-biggest lender by market value, stemmed four quarters of profit decline in the third quarter as lending growth offset a drop in stock market-related income.

SABB, an affiliate of HSBC, posted a 0.8% rise in net profit in the three months ended September 30 to 651 million riyals ($173.6 million), it said in a statement on the Saudi bourse website Tuesday.

Net interest income rose 18%, helping the bank record its first growth in profit since the second quarter of 2006, SABB said.

"Despite the reduction in brokerage and mutual funds income for the nine months of 2007 compared with 2006, SABB delivered third-quarter 2007 profits that match those generated in the same three months of last year," SABB Chief Executive John Coverdale said in the statement.

Alrajhi Bank, the kingdom's largest publicly listed lender, also brought this year's decline in profit to a halt in the third quarter on higher lending and investment income.

At SABB, total loans were up 31.6% to 54.2 billion riyals at the end of September, while customer deposits grew 17.8% to 70.3 billion riyals.

"[Loan growth].... reflects the strength of our corporate relationships and has been assisted by encouraging growth within our retail business, especially our cards and mortgage offerings," Coverdale said.

But quarterly profit came in below analysts' forecasts in a Reuters net profit survey last month, which ranged from 681 million riyals to 706.6 million riyals.

Nine-month net profit fell 22.5% compared with the year-earlier period as operating income slipped 12.5% to 3.15 billion riyals.

SABB did not disclose its non-interest income, which includes brokerage commissions. Non-interest income accounted for almost 40% of SABB's operating income in the first nine months of 2006.

Based on SABB's previous income statements, non-interest income was slashed by almost half in the first nine months to about 830 million riyals, according to a Reuters calculation. - Reuters

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SABB customer service
Posted by N. A. Mirza, Jeddah, Saudi Arabia on Wednesday 24 October 2007 at 12:00 UAE time

SABB must improve its customer service. Its customers having credit cards wait for months for the renewed credit cards despite reminders to Credit Card Department. Contacts with customer service representatives on Toll-free lines are never fruitful and even the concerned branch when approached for assistance express helplessness. On the other hand SABB charges heavily if payment is made in dollars through credit card, i.e. SR3.79 for 1US$.

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