Saudi National Bank, the country’s biggest lender by assets, reported a 20 per cent jump in its third-quarter net income on the back of higher operating profit as the kingdom’s economy continues to rebound from the Covid-19 pandemic.
Net profit for the three months to the end of September climbed to 3.8 billion riyals ($1bn), the lender said in a statement on Sunday to the Tadawul Stock Exchange, where its shares are traded.
Operating profit during the period jumped 38 per cent to 7.8bn riyals, driven by a 45 per cent rise in net income from special commissions, financing and investment activities, which amounted to 6bn riyals.
Like other lenders across the world, banks in Saudi Arabia faced tougher operating conditions in 2020 as the Covid-19 pandemic disrupted trade and tipped the world economy into a steep recession.
However, the Arab world's largest economy, which is also Opec’s biggest oil producer and the world's largest crude exporter, has bounced back with monetary and fiscal support from the government.
The International Monetary Fund expects Saudi Arabia’s economy to grow by 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.
SNB, which completed its merger with Samba Financial Group, said its total operating expenses including impairments rose 72.2 per cent during the period, mainly due to an “increase in [the] net impairment charge for expected credit losses, other general and administrative expenses, salaries and employee expenses”, among others.
Earlier this month, Fitch revised the outlook on all Saudi Arabian banks to stable, from negative, and affirmed their credit ratings at "BBB+", which is the highest in the six-member Gulf Co-operation Council bloc.
"Operating environment pressures from the pandemic have reduced, helped by recovering oil prices, high credit growth and resuming economic activity," Amin Sakhri, a director at Fitch Ratings, said in the latest peer review note on Saudi Arabian banks.