Al Rajhi Bank, the biggest Saudi lender by market capitalisation, said full-year net profit more than doubled due to higher operating income as well as lower zakat expenses.
Net profit for the period ending December 31 climbed to 10.16 billion riyals (Dh9.95bn), the bank said in a statement to the Tadawul stock exchange, where its shares trade. Operating income rose 12.5 per cent year-on-year to 19.48bn riyals, while zakat expenses decreased almost 82 per cent as the lender's 2018 results reflect the settlement of claims from previous years.
Net income from special commissions, financing and investments jumped 13 per cent to 16.4bn riyals, while customer deposits rose 6 per cent to 312.4bn riyals and investments climbed 8.7 per cent to 46.8bn riyals.
Despite oil price volatility, a weak global economy and the recent turn in the interest rate cycle, profitability at Saudi Arabia's big three banks is likely to remain strong, Moody's Investors Service said in December.
The three banks — National Commercial Bank, Al Rajhi Bank and Saudi British Bank – had a combined share of about 47 per cent of the kingdom's banking assets, but are likely to maintain profitability due to their efficient cost structures, the ratings agency said.
Al Rajhi's total operating expenses rose 13.6 per cent due to an increase in general and other administrative expenses and depreciation for 2019. The lender reported an increase in impairment charges for financing of 15.7 per cent to 1.7bn riyals. Salaries and employee–related benefits decreased during the period, the lender said.
