Two major Saudi lenders,
Al-Rajhi Bank and SABB Bank, posted first
quarter net profit increases on Monday on improving operational
profits.
Both bank results posted on the Saudi bourse website made no
references to provisions for bad loans for troubled family firms
which had weighed down on bank profits last year.
HSBC’s Saudi affiliate SABB bank beat analyst forecasts,
posting a 20.9 percent rise in first-quarter net profit to SR751
million ($200 million) in the first three months,
compared with SR621 million a year earlier.
Analysts surveyed by Reuters on average had expected the
bank to post a net profit of SR566 million.
It attributed the bank’s profits to increased operational
revenue.
SABB’s operational profit increased 1.2 percent to SR1.2
billion. The bank’s assets increased by 4.6 percent in
the first quarter to SR126 billion and its customer
deposits grew by 7.7 percent to SR97 billion.
Al-Rajhi Bank, the kingdom’s biggest Islamic
lender, made a net profit of SR1.7 billion ($453 million)
in the quarter, compared with SR1.68 billion a year
earlier, according to a bourse statement.
Six analysts surveyed by Reuters estimated the bank to post
on average SR1.8 billion.
The bank said the rise was attributed to growth in revenue
from operations.
Al-Rajhi Bank’s operational profit increased 3.7 percent in
the first quarter compared with the same period a year earlier
to 2.9 billion.
Customer deposits increased 21 percent in the first quarter
to SR160 billion, from SR132 billion in the same
period a year earlier, the bank said.
The bank’s assets rose 18 percent in the first-quarter to
SR203 billion from SR172 billion in the same period a
year earlier.
Analysts expect Saudi banks to perform better in 2011 as the
banks cut down on provisions and begin to lend more as the
country is undergoing multi-billion dollar infrastructure
projects.
On March 18, King Abdullah offered a more than $90 billion
handout to boost security and religious police forces as well as
some infrastructure projects. This handout follows a previous
package of $37 billion.
On Sunday a third lender, Saudi Hollandi Bank posted a 3.4 percent rise in first-quarter net profit but missed
analyst forecasts.
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