SABB profit surges 29pc, misses forecast
Riyadh, October 8, 2013
The Saudi British Bank (SABB), an associated company of the HSBC Group, said its third-quarter net profit jumped 29 per cent to SR846 million ($225 million) over last year, citing higher operating income and lower expenses, but missed analysts' forecasts.
Announcing the results on Tuesday, the Saudi bank said its nine-month net profit surged 15.4 per cent to hit SR2.79 billion ($743.8 million) compared to SR2.42 billion last year.
Ten analysts surveyed by Reuters had forecast it would earn a net profit of SR947.7 million in the quarter.
The operating income rose to SR4.41 billion for the nine month ended 30 September 2013, up 12.1 per cent compared to SR3.93 billion for the same period last year.
Commenting on the results, chairman Sheikh Khaled Olayan, said: “SABB’s strategy of diversifying its income streams and controlling its costs effectively ensured another strong financial performance for the nine month period. SABB has continued to focus on booking quality business while preserving strong asset quality, capital and liquidity positions.”
The Saudi lender's customer deposits grew 8.5 per cent to SR129.9 billion as of September 30, 2013 compared to SR119.7 billion the same period last year. The loans and advances to customers too registered an increase of 10.3 per cent to hit SR107.8 billion from SR97.8 billion last year.
The bank’s investment portfolio totalled SR31 billion at 30 September 2013, up 5.7 per cent compared to SR29.3 billion the year before.
SABB and other Saudi banks have benefited from rising lending, deposits and deal activity in an economy buoyed by years of high state spending which is backed by strong oil prices and record government surpluses.
The Saudi bank's total assets surged 6.4 per cent to SR166.3 billion compared to SR156.2 billion last year. The earnings per share rose to SR2.80 against SR2.42 for the corresponding period of the previous year.
SABB managing director David Dew had told Reuters in an Oct 1 interview that the bank had been outperforming its peers in recent quarters in terms of net income and profit margins.
He said a three-year strategic plan that the bank was finalising is based on an assumption that government spending will continue to grow and that Saudi bank lending levels to the private sector are sustainable in the mid teens for the next two-three years.
Samba Financial Group, the second-largest listed Saudi lender earlier on Tuesday posted flat net profit growth, while on Monday Saudi Hollandi Bank and Riyad Bank posted healthy jumps in earnings.-Reuters and TradeArabia News Service