Top Saudi banks post upbeat Q2 results
Riyadh, July 11, 2012
Leading Saudi banks - Al Rajhi, SABB, Saudi Hollandi and Samba Financial Group - have reported upbeat quarterly results topping or meeting estimates, boosted by rising loan demand.
Al Rajhi, the country's biggest Islamic lender, on Tuesday made a net profit of SR2.1 billion ($560 million) in the three months ending June 30, up by 13.6 per cent compared with the same period a year earlier.
Analysts surveyed by Reuters had expected the bank to post an average profit of SR2 billion.
The bank attributed the rise to an increase in operating income and said it would pay a dividend of SR1.2 per share for the first half of the year, after the deduction of zakat.
Meanwhile, Saudi Hollandi Bank posted a 26 per cent 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 SR332.3 million compared with SR263.3 million in the same period a year earlier. On average, analysts surveyed by Reuters had expected the bank to post SR286.2 million.
'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.
SABB Bank posted a 7.4 per cent rise in the second quarter net profit due to increased operating income and lower expenses. The bank also beat analyst forecasts of SR829.4 million, 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 SR915 million in the three months ending June, compared with SR852 million in the same period a year earlier.
The kingdom's second-largest listed lender by market value, Samba Financial Group posted a 5.1 per cent rise in second-quarter net profit on higher operating income, also beating analyst forecasts.
Samba made a net profit of SR1.16 billion for the second quarter compared with SR1.1 billion in the same period a year earlier. Analysts expected the bank to post an average of SR1.13 billion.-Reuters