Saudi National Bank’s second-quarter profit jumps more than 9% to $1.3bn

Kingdom's largest lender reports $2.26 billion in operating income during the three month period

Tadawul-listed SNB reported a 10 per cent jump in its six-month profit to 10 billion riyals. AFP

Saudi National Bank, the largest lender in Saudi Arabia by assets, has reported a 9.3 per cent annual jump in its second-quarter profit on higher operating income and lower provisions for bad loans.

Net profit for the three months to the end of June climbed to 5 billion Saudi riyals ($1.33 billion), the bank said on Tuesday in a filing to the Tadawul bourse, where its shares are traded.

“Growth in net income attributable to equity holders of the bank … [was] driven by higher operating income, along with lower operating expenses, including net impairment charge for expected credit losses,” SNB said.

Total operating income increased by 2 per cent to about 8.5 billion riyals ($2.26 billion) as fees from banking services, foreign exchange income and investment income increased during the period, it said.

Meanwhile, provisions for credit losses declined by 87 per cent annually to 76 million riyals.

SNB was created from the merger of National Commercial Bank and smaller rival Samba Financial Group in 2021.

The bank’s six-month profit jumped 10.4 per cent to 10 billion riyals as operating income grew by about 5 per cent to 17.2 billion riyals.

Total provisions for expected credit losses during the six-month period fell about 42 per cent to 569 million riyals.

Loans and advances grew 7.7 per cent in the first half to 577.8 billion riyals, while clients’ deposits rose 1.55 per cent to 602.2 billion riyals.

Lenders in the kingdom are expected to remain on a profitable path in 2023 with continued credit growth despite tighter liquidity, as they capitalise on a favourable operating environment amid continued growth momentum in the Arab world’s largest economy, according to Fitch Ratings.

Expansion of the kingdom’s non-oil gross domestic product will help lenders to boost their profitability this year, the ratings agency said in its latest report on Saudi Arabia's banking sector.

The kingdom had the highest annual growth rate among the world’s 20 biggest economies in 2022 after its gross domestic product expanded by 8.7 per cent on higher oil revenue and a robust non-oil private sector.