Saudi Arabia’s Samba Financial Group, which is in the process of being merged with its larger rival National Commercial Bank, reported a 5.3 per cent increase in its net profit for 2020 despite a rise in operating expenses.
Net income for the period ending 31 December rose to 4.2 billion Saudi riyals ($1.1bn), the lender said in a statement on Wednesday to the Tadawul stock exchange, where its shares trade.
A 9.6 per rise in operating income to 9.43bn riyals, helped by a jump in trading income, gains on investments and exchange income underpinned the profitability. The increase in annual income, however, was “partially offset” by an 11 per cent decline in income from special commission, which amounted to 5.67bn riyals.
The bank’s total investments climbed 19.7 per cent to 101.23bn riyals at the end of the last year.
Samba’s assets increased 14.4 per cent to 296.94bn riyals by year-end. Its loan book grew 10.2 per cent to 156bn riyals, while customers’ deposits jumped 15.3 per cent to 207.71bn riyals.
Total operating expenses, however, increased 13.2 per cent “mainly due to increase in salaries and employee-related expenses and provision for credit impairment", the lender said without giving a break down.
NCB and Samba in October agreed to merge to create the biggest banking entity in Saudi Arabia, the Arab world's largest economy.
The deal was approved by the Saudi Central Bank on February 1, while the kingdom's Capital Market Authority has also approved NCB’s application to increase its share capital to enable the merger.
NCB, the biggest lender by assets in the country, earlier this month said it plans to change its name to Saudi National Bank following its merger with Samba by the end of first half of 2021.
The combined entity will have a market share of about 25 per cent, with a network of more than 500 branches.