Samba Financial earnings squeezed

Samba Financial Group, Saudi Arabia's second largest bank by market value, missed forecasts with its smallest quarterly profit since 2006, when a stock market crash eroded revenues.

Samba, the kingdom's third largest broker, had been recovering from the crash and managed to increase profit on a quarter-to-quarter basis in each of the preceding three-month periods. Fourth-quarter profit fell almost 27% from the previous three months.

Net profit in the three months to December 31 was 955 million riyals ($254.7 million), up 1.8% from the year-earlier period, the bank said.

Forecasts for the fourth quarter ranged from 1.42 billion riyals to 1.5 billion riyals, according to a survey by newswire Reuters last month.

Samba did not give detailed quarterly figures.

Full-year profit fell 7.7% to 4.8 billion riyals, or 8.05 riyals per share, compared with 5.2 billion riyals, or 8.68 riyals per share, said the bank.

"This decline is due to a decrease in brokerage and asset management revenue," chief executive Eisa Al-Eisa said in the statement on the bourse website.

All Saudi banks reported declines in brokerage revenues during the stock market crash of 2006, when the largest Arab bourse lost half its value between February and July. That year it was the second worst performing Arab market.

In the fourth quarter the Saudi benchmark rallied 42.7%, making it the best performer among Arab markets.

Net operating income rose 5% in the fourth quarter, the statement said, without giving more details.

Loans rose 21% to 81 billion riyals in the year to December 31, and deposits grew 22% to 116 billion riyals, it said. Assets were up 24.5% at 154 billion riyals.

In the first half, banking fees - which include stock market related income - fell more than 41% to 830 million riyals. They accounted for almost 22.2% of income from operations. (Reuters)

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