Saudi lender National Commercial Bank lifted by rise in fees and investment income

July 26, 2018
The kingdom’s largest lender reported a 6.7% rise in second-quarter net profit

Saudi Arabia’s National Commercial Bank (NCB), the kingdom’s largest lender, reported a 6.7 per cent rise in second-quarter net profit on Tuesday on increased fees, commission and investments.

It was the fourth Saudi bank to report earnings on Tuesday, with the other two reporting higher profit and the third, Banque Saudi Fransi (BSF), the kingdom’s fifth-largest bank by assets, posting an 8.4 per cent profit fall.

Despite limited credit growth, Saudi banking industry profitability is expected to edge up this year as higher public spending helps to lift interest margins.

NCB made a net profit of 2.58 billion riyals (Dh2.52 billion, $688 million) in the three months to June 30, up from 2.42 billion riyals in the same period of 2017, it said in a bourse statement.

SICO Bahrain forecast that NCB would make a quarterly profit of 2.52 billion riyals.

A rise of 4.1 per cent in operating income and 2.9 per cent in special commission income was partially offset by higher total operating expenses, the bank said.

Deposits at the bank, which has close ties to the government, rose 0.9 per cent year on year to 317.65 billion riyals at the end of June. Loans and advances at the end of June stood at 266.04 billion riyals, up 3.6 per cent from a year earlier.

BSF made a net profit of 921 million riyals in the three months to June 30, down from 1.01 billion riyals in the same period of 2017, it said in a bourse statement.

Missed average forecast

The bank attributed the decline to an 18.5 per cent rise in total operating expenses, primarily because of higher provisions for credit losses and other expenses.

The earnings missed the average forecast of three analysts polled by Reuters, who expected the bank to make a net profit of 1.08 billion riyals.

Arab National Bank reported a 8.3 per cent rise in second-quarter net profit to 919.1 million riyals, in line with the forecasts of three analysts.

Bank Albilad posted net profit for the quarter of 275.9 million riyals, up by 16.1 per cent from the same period last year.

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