Saudi National Bank reports 11% rise in 2021 income amid continued economic recovery

The kingdom's largest lender said net profit climbed to about $3.4 billion

Tadawul-listed SNB said its operating profit surged more than 32 per cent last year. Reuters
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Saudi National Bank, the kingdom’s biggest lender by assets, reported an 11 per cent increase in 2021 profit as operating profit rose amid continued economic recovery.

Net profit for the 12 months to the end of December climbed to about 12.7 billion riyals ($3.4bn), the lender said in a statement on Wednesday to the Tadawul Stock Exchange, where its shares are traded.

This is the first time SNB, which completed its merger with Samba Financial Group last year to create the regional banking powerhouse, has reported its annual results.

Operating profit jumped more than 32 per cent a year to about 28.5bn riyals, boosted by a 33 per cent surge in net income from special commissions and financing and investment activities, the bank said.

Samba's income statement result was integrated starting from April 1, 2021, in line with the international financial reporting standards, SNB said.

As is the case regionally and internationally, banks in Saudi Arabia faced tough operating conditions in 2020 amid pandemic headwinds that pushed the world economy into its deepest recession since the 1930s.

However, Saudi Arabia, the Arab world's largest economy and Opec’s biggest oil producer, has made a strong rebound. The International Monetary Fund expects the kingdom’s economy to expand 4.8 per cent this year, faster than the 2.9 per cent that was forecast last year, which bodes well for prospects of the earnings growth of financial institutions.

In November, Moody's Investors Service affirmed the long-term ratings of nine banks in Saudi Arabia and changed their outlook to stable from negative. It said the move was primarily driven by the lenders’ resilient performance and the expectation that the government’s capacity to support them will remain unchanged.

“The banks have managed to maintain strong asset quality and capital buffers and their liquidity buffers remain solid,” Moody’s said at the time.

SNB said its total operating expenses rose 63 per cent year on year, mainly due to higher net impairment charge for expected credit losses pertaining to the merger, as well as general and administrative expenses, salaries and employee expenses.

Provisions for expected loan losses doubled at the end of last year to more than 3.9bn riyals, from about 2bn reported at the end of 2020.

SNB's assets as of December 31 last year stood at 914bn riyals, up 53 per cent from the 599bn riyals reported in 2020.

The lender’s loans and advances surged more than 66 per cent to 240bn riyals while customers’ deposits jumped 41 per cent to 587bn riyals.

Updated: February 02, 2022, 11:00 AM