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Riyad Bank posts profit of $191mn
Riyad Bank, Saudi Arabia's fourth largest bank by market value, said it made a third-quarter net profit of 716 million riyals ($190.9 million), up 10% from the year-earlier period.
Analyst forecasts of the bank's third quarter earnings ranged from 731.37 million riyals to 839 million riyals, according to a Reuters survey last month.
A statement posted on the bourse website said operating income was 3.83 billion riyals in the nine months to September, up 6% year-on-year. Earnings per share grew to 3.55 riyals in the same period, up from 3.53 riyals a year ago.
The bank posted the 10% growth partly through aggressive lending but profit growth slowed compared to the second quarter due mainly to a continuing decline in stock activity.
Riyad Bank had outperformed listed Saudi banks in earnings growth in the second quarter, when its net profit rose 24.3% to 848 million riyals.
Net interest income reached 839 million riyals in the third quarter, up 17% from the year-earlier period and up 1.7% from the second quarter of 2007.
"The bank continued to focus on core banking activities," Chairman Rashed Abdul-Aziz Al-Rashed said in the statement.
Loans in the nine month period stood at 64.8 billion riyals, up 28% from their level a year earlier, more than double the growth in deposits which totalled 76.4 billion riyals at the end of last month, the bank said.
Non-interest income, made up mainly of brokerage commissions, reached 408 million riyals in the third quarter, down 2.2% from a year ago and down 25.6% from the second-quarter of 2007, according to Reuters calculations.
"The volume of trade in the stock market slid by some 17% in the third quarter compared to its level in the second quarter... This does not help the recovery process of banks," said Ibrahim Al-Alwan, Deputy Chief Executive of KSB Capital, which had forecast a third-quarter net profit of 804 million riyals for Riyad Bank.
"This said, Riyad is faring well in the recovery process. It has continued to be aggressive on lending," Al-Alwan said.
In September, the bank said it planned to raise 13.13 billion riyals through a rights issue which would increase its capital by 140% and beef up reserves.
"The planned capital increase shows that they are getting really aggressive on lending. It's a huge capital increase. A great chunk of it will be directed to fund major projects which might not yield high income but represents lower risk compared to retail lending," Al-Alwan added. - Reuters
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