Arab Nat'l Bank Q3 profit inches up

DEBT PROVISIONS: Riyadh-based Arab National Bank does not indicate any bad debt provisions linked to troubled Saad, Algosaibi groups. (Getty Images)

Saudi-based Arab National Bank (ANB) on Monday posted a 0.8 percent rise in third-quarter net profit on the back of modest growth in lending income and income from non-lending services.

ANB made 633 million riyals ($168.8 million) in the three months to Sept. 30 against 627.7 million riyals a year earlier, it said in a statement posted on the bourse's website.

The bank, in which Arab Bank holds a 40 percent stake, posted a 1.6 percent rise in net lending income at 838 million riyals while net income from non-lending operations - which includes brokerage fees and foreign exchange - rose 5 percent to 229 million riyals.

The rise in net lending income contrasts with a drop in loans to 68.8 billion riyals by the end of September against 74.5 billion riyals a year earlier and 71.2 billion riyals by end-June, 2009.

Deposits also fell to 80.5 billion riyals versus 88.6 billion riyals a year earlier and 85.2 billion riyals by the end of the second half of this year.

Earnings per share stood at 3.19 riyals by end of September up from 3.16 riyals a year earlier, it added.

ANB did not say if it had made provisions for potential bad debts linked to private troubled conglomerates Saad Group and Ahmad Hamad Algosaibi and Bros Co during the third quarter.

Like many peers in the region, ANB booked 128.6 million in provisions for loan losses during the first half of this year which is more than twice their level in 2008.

Before its earnings announcement, ANB's shares ended 0.83 percent lower at 48 riyals but were still up 53.8 percent for the year so far, ahead of the all-share index and the banking industry's benchmark

Most Saudi banks posted lower net profits during the second quarter. Analysts believe some of these provisions were to cover their exposure to the two conglomerates.

Morgan Stanley said this month that Saudi Arabian banks' third-quarter net income would be under pressure due to the higher amount of money banks set aside to cover bad loans and on subdued fee income.  (Reuters)

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