Al Rajhi Bank reported a slump in net profit for the first three months of 2014 yesterday, marking the second quarter in a row that Saudi Arabia’s largest listed lender has posted a big decline in earnings.
The bank made 1.71bn riyals ($456mn) in the three months to March 31, down 16.9% from 2.05bn riyals in the same period a year earlier, it said in a bourse filing.
Analysts surveyed by Reuters had expected the bank to post an average net profit of 2.05bn riyals for the quarter.
Al Rajhi said in yesterday’s statement that the profit drop was due to an increase in operating expenses; it did not elaborate. Saudi companies issue brief earnings statements early in the reporting period before publishing more detailed results later.
Al Rajhi’s fourth-quarter net profit dropped 19.1%, which was also due to increased impairment allowances. The bank reported a drop in profits for the third quarter of last year, albeit a marginal one.
The decline in first-quarter earnings at Al Rajhi contrasts with positive results reported by some other Saudi banks.
Riyad Bank and Saudi British Bank posted profit growth of 13.5% and 14% respectively, while Banque Saudi Fransi’s first-quarter profit jumped 25% after a big drop in fourth-quarter earnings.
Al Rajhi’s earnings decline in the opening three months came despite modest year-on-year increases in operating income and profit from special commissions.
Loans and advances stood at 193.1bn riyals on March 31, up 7% on the same point in 2013. Customer deposits rose 2.9% over the same time frame to 238.5bn riyals.
