Al-Rajhi Bank Q1 falls on provisions
Riyadh, April 18, 2010
Saudi Arabia's Al-Rajhi Bank, the Gulf region's largest Islamic bank by market value, on Sunday said first-quarter net profit fell 2.8 percent, below analysts' forecasts, as provisions continue to weigh.
The Islamic bank posted a net profit of 1.684 billion riyals ($439 million) in the three months to end March 31, down from 1.732 billion riyals in the year-earlier period.
The bank cited the its conservative policy for taking provisions as a reason for the decline, without providing further details.
Profits at most Saudi banks came under pressure in 2009 as a result of provisions against troubled Saudi firms, and first-quarter earnings were pulled down by a slowdown in lending activity.
Al-Rajhi's loan portfolio, however, rose by 6 percent to 117 billion riyals while deposits increased 8 percent to 129 billion riyals.
The average earnings forecast for Al-Rajhi was 1.75 billion riyals in a Reuters survey. The bank in the fourth quarter of 2009 booked 513.9 million riyals in provisions against loan losses.
Al Rajhi's operating income reached 2.8 billion riyals, up 3.37 percent from the previous year, and lending income rose 9.82 percent to 2.2 billion riyals. - Reuters