ECONOMY

Saudi’s Al Rajhi Bank Q1 net profit rises 21 pct on higher fees

The bank aims to boost its mortgage lending as more affordable housing comes on the market, Chief Executive Steve Bertamini told Reuters. (Shutterstock)

Al Rajhi Bank, Saudi Arabia’s second-largest lender by assets, reported double-digit growth in first-quarter net profit on Tuesday, helped by higher special commission income and fees.

Saudi Arabia’s biggest Islamic lender said net profit rose 21 percent in the three months ended March 31 to 2.89 billion riyals ($771 million). It made net profit of 2.38 billion riyals in the same period a year earlier.

The bank aims to boost its mortgage lending as more affordable housing comes on the market, Chief Executive Steve Bertamini told Reuters this month.

Al Rajhi, which has traditionally focused on consumer banking, has been cautiously expanding its exposure to the private sector, Bertamini said.

Saudi banks’ performance in 2019 should be boosted by a surge in liquidity and an anticipated recovery in lending against a backdrop of higher oil prices.

Saudi Arabia’s economy grew in the fourth quarter of last year at its fastest rate since early 2016 due to an expansion in the oil sector, while non-oil growth was sluggish, statistics agency data showed in March.

Al Rajhi attributed its performance to an increase in total operating income, due to special commission income and fees.

Operating income for the quarter rose by 12 percent year-on-year to 4.64 billion riyals, while profits from special commissions increased 15 percent over the same time frame to 3.94 billion riyals.

Loans and advances at the end of March stood at 236.42 billion riyals, up 3.6 percent year-on-year, while deposits rose 3.4 percent to 293.5 billion riyals over the same period.

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Last Update: Tuesday, 23 April 2019 KSA 18:13 - GMT 15:13
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