Fourth quarter profit rise despite increased provisions
Saudi Arabia’s Al-Rajhi Bank, the Gulf’s biggest Islamic lender by market value, has reported a 3.2 per cent rise in net profit in the fourth quarter of 2009 to SR1.47bn ($392m).
It represented the bank’s lowest quarterly net profit in the year. Analysts’ forecasts had ranged between SR1.61bn and SR1.96bn. Few Saudi banks have reported an increase in profits in the last quarter of 2009 but analysts have said that the rise was lower than expected.
The bank has been hit by the slowdown in lending in the kingdom and rising provisions against loan losses after the multi-billion dollar debt defaults in May last year by Saudi family-owned firms Ahmad Hamad Al-Gosaibi & Bros. and the Saad Group.
Al-Rajhi almost doubled its provisions to SR1.3bn over the first nine months of 2009.
Net profit from lending rose to SR2.2bn at the end of the fourth quarter, representing the lowest quarterly increase in 2009.
The bank reported a 5.7 per cent increase in loans and advances to SR149bn and an increase in deposits of 3.4 per cent over the course of the year to SR121bn.
Total assets held by the bank rose to SR171bn at the end of 2009, 4.9 per cent higher than at the end of 2008.
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