Al Rajhi Bank, Saudi Arabia’s second-largest lender by assets, reported a 43 per cent surge in its third-quarter net profit on the back of higher operating income as the Arab world’s largest economy recovers from the coronavirus-induced slowdown.
Net profit for the three months to the end of September rose to 3.8 billion Saudi riyals ($1bn), the lender said in a statement on Sunday to the Tadawul Stock Exchange, where its shares are traded.
Operating profit jumped 28 per cent to 6.57bn riyals during the period, driven by a 24 per cent rise in net income from special commissions, financing and investment activities, which amounted to 5.2bn riyals.
Saudi Arabia’s economy is expected to grow 2.8 per cent this year, after shrinking 4.1 per cent last year, driven by higher oil prices and investment from its sovereign wealth fund, according to the International Monetary Fund.
Brent, the global benchmark for more than half of the world’s crude, rose more than 60 per cent this year to trade above $85 a barrel on Sunday, with West Texas Intermediate trading at $83.76 a barrel.
Al Rajhi also said the total operating expenses during the period climbed 7.3 per cent “due to an increase in depreciation expense, and salaries and employee-related expenses”.
General and administrative expenses declined while impairment charges for financing rose by 27.7 per cent to 594 million riyals.
The bank’s nine-month net profit jumped 44 per cent to 10.7bn riyals as total operating income climbed 26.3 per cent to 19bn riyals.
Net income from special commissions, financing and investment activities climbed 22.5 per cent to 15bn riyals.
Assets of the bank during the nine months rose 35.4 per cent to 583bn riyals while investments jumped 44 per cent to 82bn riyals. Client deposits rose 38.5 per cent to 478.3bn riyals.