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Saudi bank’s profit falls 3.3%, in line with forecasts

Saudi bank’s profit falls 3.3%, in line with forecasts

RIYADH: Samba Financial Group, Saudi Arabia’s third-largest bank by assets, reported a 3.3 per cent drop in second-quarter net profit on Sunday, in line with analysts’ forecasts, as operating expenses rose. It is the last major Saudi bank to report earnings during what has been a generally subdued quarter. The bank made a profit of 1.27 billion riyals ($338.7 million) in the three months to June 30, down from 1.31 billion riyals in the same period a year earlier, it said in a bourse statement. Four analysts polled by Reuters had on average forecast the bank would make a quarterly net profit of 1.22 billion riyals. The bank attributed the fall in net profit to a 6.5 per cent rise in operating expenses. Operating expenses rose as a result of higher credit costs and other general and administrative expenses, it said.

The Kingdom’s banks are feeling the fallout from weaker oil prices as the government cuts spending in a bid to fill a budget shortfall, dragging down economic growth and pushing up loan defaults. Still, total operating income rose due to an increase in trading income, net special commission income and trading and other operating income. Operating income for the quarter was flat at 1.99 billion riyals, while profits from special commissions increased 3.5 per cent over the same time frame to 1.39 billion riyals. Loans and advances at the end of June stood at 120.52 billion riyals, falling 7.9 per cent on the same point of 2016, while deposits dipped 0.5 per cent to 171.27 billion riyals over the same period.