Al Rajhi Bank's second-quarter profit beats analysts' estimates
Lender reports jump in operating profit but also higher impairment charges on loans
Al Rajhi Bank, the biggest Saudi lender by market capitalisation, reported a 4.3 per cent year-on-year rise in its second-quarter net income, helped by an increase in operating income, which beat analysts’ estimates.
Net profit for the three-month period ending June 30 rose to 2.58 billion Saudi riyals (Dh2.54bn), the bank said in a statement to the Tadawul stock exchange, where its shares trade. Revenue for special commissions and investments rose to 4.18bn riyals, a 14 per cent jump from a year earlier, it added.
Operating income for the three-month period rose 13.4 per cent year to 4.86bn riyals, topping the 4.56bn riyals estimate of analysts polled by Bloomberg.
Al Rajhi attributed the increase in operating income to a rise in net special commission income, fees from banking services and exchange income. In contrast, total operating expenses rose by 16 per cent due to an increase in depreciation and other general expenses.
Al Rajhi also recorded a 15.7 per cent rise in impairment charges on loans, according to the bourse filing.
The bank said its first-half 2019 net income climbed 8.3 per cent to 5.18bn riyals.
Al Rajhi, Saudi Arabia’s second-largest lender by assets, earlier this year said it is in talks for a merger of its fully-owned subsidiary in Malaysia with a state-backed financial institution in the South-East Asian country.
The possibility of combining the balance sheets of Al Rajhi Banking and Investment Corporation Malaysia and Malaysian Industrial Development Finance is at an early stage, the Saudi lender said in January.
Updated: July 30, 2019 02:33 PM