Saudi Arabia's National Commercial Bank, the kingdom's biggest lender by assets, said 2019 full year profit surged 19 per cent, beating analysts' estimates, as operating income climbed and costs fell.
Net profit for the 12-month period ending December 31, jumped to 11.4 billion riyals (Dh11.2bn), the lender said in a statement to the Tadawul stock exchange, where its shares trade. The yearly profit was higher than the 10.3bn riyals average net income forecast of analysts polled by Refintiv. Total operating income grew 8.9 per cent to 20.6bn riyals.
NCB attributed the rise in operating income to growth in “net special commission income, investment related income, and lower other operating [expense],” the lender said. However fees from banking and services and foreign exchange income fell. The bank's shares rallied on Wednesday, advancing 3.1 per cent, pushing the Tadawul index up 0.5 per cent.
Total operating expenses declined 4.1 per cent, mainly on the back of lower “net impairment charge for expected credit losses” that fell 1 per cent to 1.42bn riyals at the end of last year.
Saudi Arabia, the biggest Arab economy, is implementing wide-ranging economic and social reforms, as it looks to cut dependence on hydrocarbons, grow domestic industries and diversify revenue streams.
Banks in the kingdom are benefiting from continued government investments in infrastructure, housing and industrial sectors, boosting mortgage and project finance markets in the country.
NCB, whose assets grew 12 per cent to 507.3bn riyals at the end of 2019, abandoned plans to merge with the country’s fourth-largest lender Riyad Bank last month. The halting of talks came almost a year after both lenders announced their intentions and initiating exploratory talks in December 2018.
The Public Investment Fund, Saudi Arabia’s sovereign wealth fund which holds stakes in some of the biggest financial institutions of the country, owns 44 per cent of NCB and about 22 per cent of Riyad Bank.
