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Al Rajhi Bank Q3 profit rises on lower expenses

DUBAI, October 13, 2015

Saudi Arabia's Al Rajhi Bank posted its first quarterly rise in net profit in nine quarters on Tuesday helped by lower expenses, the kingdom's econd-largest listed lender by assets said.

Net profit rose 3.6 per cent to SR1.72 billion ($458.8 million) for the three months to September 30, in line with an average estimate from analysts of SR1.77 billion.

The bank had posted declining profits in the preceding eight quarters, which it attributed to higher provisioning and higher operating expenses.

Saudi lenders' net interest income is under pressure from weakening loan growth and competition, especially in the retail market. Analysts also warn a prolonged slump in oil prices could hurt the sector.

Al Rajhi said operating income fell by 4.1 percent to SR10.15 billion, while profits from special commissions increased 2.4 percent to SR7.47 billion.

Loans and advances at the end September stood at SR209.91 billion, up 3.1 percent, while deposits rose 6.2 percent to SR265.48 billion.

Al Rajhi has been squeezed by regulations on banking fees enforced last year in addition to new mortgage lending limits introduced in November 2014 which capped the maximum loan-to-value ratio at 70 percent.

In May the bank appointed former Standard Chartered executive Steve Bertamini as chief executive to replace Suleiman bin Abdul Aziz al-Zabin. Bertamini is believed to be Rajhi's first non-Saudi CEO since its late 1950s founding.

Saudi companies issue brief earnings statements early in the reporting period before publishing more detailed results. - Reuters




Tags: Saudi | Bank | Al Rajhi |

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