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Sat 16 Jan 2010 08:11 PM

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Saudi's Al Rajhi's Q4 rises below analysts' forecasts

Bank's Q4 profits are its lowest in 2009 as bad debt provisions hit Saudi banks.

Saudi's Al Rajhi's Q4 rises below analysts' forecasts
LOW RISE: Al Rajhi bank posted a less than expected profit rise in a weak Q4. (Getty Images)

Saudi based Al Rajhi Bank, the Gulf's biggest Islamic lender by market value, posted a lower than expected 3.2 percent rise in its fourth quarter net profit.

Al Rajhi made $392 million in the three months to end December compared to $378.65 in the same period a year ago, the bank said in a statement on Saturday.

It was Al Rajhi's lowest quarterly net profit in the year and below analysts' expectations that ranged between $429.32 million and $522.65 million.

Several Saudi banks posted weaker fourth quarter and annual earnings for 2009 due mainly to the global economic slowdown and provisions for loan losses after multi billion dollar debt defaults last year by some family owned firms which made banks more meticulous on lending.

Saudi banks more than tripled provisions against loan losses over the first nine months of 2009 to $1.61 billion.

Al Rajhi almost doubled its provisions to $346.65 million over the same period.

Net profit from lending - which the Islamic lender calls net profit from financing and investment - rose to $586.65 million during the fourth quarter. That was also the lowest since the start of 2009, but up 2.1 percent from a year earlier.

Operating income rose 3 percent to $733.31 million.

Total loans reached $39.7 billion by end 2009, up from 5.7 percent from end 2008 and $38.42 billion by end September, 2009 while deposits rose to 3.4 percent in 2009 to $32.2 billion down from $32.8 billion by end September, 2009.

Net profit from non lending operations rose 7.7 percent in the fourth-quarter to $138.12 billion but was down by almost 16 percent from the third quarter of last year, based on Reuters calculations.

Net profit for all of 2009 was $1.80 billion - or $1.20 per share - up from $1.74 billion in 2008 or $1.15 per share.

Al Rajhi's shares have gained 4.2 percent so far this year slightly outperforming both the all share index and the banking industry's measure. (Reuters)

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