Big Saudi banks post upbeat second quarterly results

Big Saudi banks post upbeat second quarterly results

Four major Saudi banks reported upbeat quarterly results on Tuesday, topping or meeting estimates, boosted by rising loan demand.

July 11, 2012 11:30 by Reuters

Four major Saudi banks reported upbeat quarterly results on Tuesday, topping or meeting estimates, boosted by rising loan demand.

Al Rajhi Bank, the country’s biggest Islamic lender, made a net profit of 2.1 billion riyals ($560 million) in the three months ending June 30, up by 13.6 percent compared with the same period a year earlier.

Analysts surveyed by Reuters had expected the bank to post an average profit of 2 billion riyals..

The bank attributed the rise to an increase in operating income and said it would pay a dividend of 1.2 riyals per share for the first half of the year, after the deduction of zakat.

Meanwhile, Saudi Hollandi Bank posted a 26 percent rise in net profit for the second quarter due to higher operating income and lower costs, beating analyst forecasts.

The eighth-largest lender in the kingdom made a net profit of 332.3 million riyals compared with 263.3 million riyals in the same period a year earlier. On average, analysts surveyed by Reuters had expected the bank to post 286.2 million riyals.

“I think this is reflective of the general high level of confidence in the economy,” said Jarmo Kotilaine, chief economist at NCB Capital.

“Banks completed the provisioning cycle and they are pretty much active and lending They are eager to build assets and are in a good position to do so,” he added.

Saudi’s SABB Bank posted a 7.4 percent rise in the second quarter net profit due to increased operating income and lower expenses. The bank also beat analyst forecasts of 829.4 million riyals, on average.

Saudi banks are benefiting from the government’s expansionary fiscal policy, ample liquidity and improving corporate loan demand, according to a July 2 report from Deutsche Bank, which predicted second-quarter net profits across the sector would increase 6 percent year-on-year.

SABB made a net profit of 915 million riyals in the three months ending June, compared with 852 million riyals in the same period a year earlier.

The kingdom’s second-largest listed lender by market value, Samba Financial Group posted a 5.1 percent rise in second-quarter net profit on higher operating income, also beating analyst forecasts.

Samba made a net profit of 1.16 billion riyals for the second quarter compared with 1.1 billion riyals in the same period a year earlier. Analysts expected the bank to post an average of 1.13 billion riyals.

(Reporting by Asma Alsharif)