Saudi based Arab National Bank (ANB) on Monday posted an 8.8 percent drop in first quarter net profit, becoming the latest casualty of a decline in lending income that is plaguing other Saudi rivals. ANB made $169.1 million in the three months to end March, compared with $185.3 million in the same period a year earlier, it said in a statement.
The bank, in which Jordan’s Arab Bank holds a 40 percent stake, posted a 12 percent fall in net lending income to $214.1 million, while net income from non lending operations – which includes brokerage and foreign exchange – rose 31.4 percent to $85.8 million.
ANB’s loan portfolio fell 10.1 percent to $17.4 billion while its deposits slid 8.1 percent to $20.7 billion.
Profits at most Saudi banks came under pressure during the first quarter due to a decline in lending income.
This followed a difficult 2009 during which Saudi lenders’ profitability was eroded by provisions to counter exposure to some troubled Saudi firms and also from flat credit growth as lenders restricted loans during the global slowdown.
Operating costs rose by 6.3 percent year on year to $130.9 million during the first quarter, based on Reuters calculations.
ANB did not say if it had made provisions for non performing loans. The bank covered with provisions about 76 percent of its non performing loans last year, which jumped to $511.98 million from $78.9 million in 2008.
Because of limited transparency in the Saudi market, it was not clear where this increase in non performing loans came from.
ANB’s shares have gained 4.5 percent so far this year underperforming both the all share index and the banking industry’s benchmark. (Reuters)
Follow us on
