Saudi Arabia's Al Rajhi Bank first quarter profit rises 7.3%
Net special commission and investments boost income
Al Rajhi Bank, Saudi Arabia’s biggest bank by market value, posted a 7.3 per cent increase in first quarter profit due to a boost in special commission income and investments.
Net income rose to 2.38 billion Saudi riyals in the first three months of the year compared to 2.22bn riyals in the corresponding period last year. Net special income and investments rose 8.1 per cent to 3.12bn riyals in the first quarter versus 2.89bn riyals in the same period last year.
The earnings missed the mean 2.46bn riyals forecast of analysts polled by Bloomberg. The forecasts ranged between 2.42bn riyals and 2.48bn riyals.
In a filing to the Saudi Tadawul stock exchange the bank did not specify what the net special commission income and investments were.
The fortunes of Saudi Arabian banks, in general are improving on the back of a return to economic growth in the Arab world’s largest economy after it slowed down in the wake of a three-year oil slump that started in 2014.
Saudi Arabia’s listed banks on aggregate reported a 9 per cent year-on-year increase in net profits in 2017, an improvement on a 5 per cent decline the previous year, due to lower interest expenses and prompting expectations of a credit-positive recovery in 2018, according to a Moody’s report published in March.
Improvements in aggregated profits last year were mainly due to lower interest expenses, according to the rating agency’s report.
Saudi banks’ interest expenses declined 12 per cent last year, reflecting an improvement in domestic funding conditions after a significant tightening in 2016 because of falling oil prices. Meanwhile, the average cost of funds fell to 0.9 per cent in 2017, after doubling to 1 per cent in 2016.
Al Rajhi's full-year 2017 profit rose 12.2 per cent to 9.12bn riyals from a year earlier.
Updated: May 1, 2018 02:45 PM