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Abu Dhabi, UAETuesday 19 June 2018

Saudi British Bank sees third-quarter earnings surge

Affiliate of HSBC said it made 1.08 billion Saudi riyals (Dh1.05bn) in the three months

Saudi Riyal banknotes. Saudi British Bank reported profits up 8.8 per cent in third quarter. Faisal Al Nasser/Reuters
Saudi Riyal banknotes. Saudi British Bank reported profits up 8.8 per cent in third quarter. Faisal Al Nasser/Reuters

Saudi British Bank (Sabb), the kingdom's sixth-largest bank by assets, reported an 8.8 per cent rise in third-quarter net profit on Wednesday, meeting analysts' forecasts.

The bank, an affiliate of HSBC, said it made 1.08 billion Saudi riyals (Dh1.05bn) in the three months ending Septared 30, compared with 995 million riyals in the same period a year earlier, according to a bourse filing.

Sabb is in merger talks with local peer Alawwal Bank, with the central bank governor Ahmed Al Kholifey telling Al Arabiya television on October 15 that the situation regarding the possible merger would be clear by the end of this year.

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The bank attributed its rise in net profit to a 4.6 per cent increase in operating income, propelled by higher net special commission income, gains on non-trading investments and dividend income, in addition to lower provisions for credit losses.

After contending with lower state and consumer spending as a result of reduced oil prices, Saudi banks are expected to benefit as the government loosens austerity measures, helping accelerate credit growth.

Saudi bank results so far have generally been in line with or better than expectations, with the two largest lenders, National Commercial Bank and Al Rajhi Bank reporting profit growth of 8.4 and 12.7 per cent, respectively.

Loans and advances at the end of September stood at 116.7bn riyals, falling 7.3 per cent on the same point of 2016, while deposits dropped 6.6 per cent to 134.6bn riyals over the same period.