Riyad Bank’s profits fell 16.5 per cent for the three months to the end of September, as the impact of lower oil prices and the summer months weighed on the profits of Saudi lenders.
Profits at Riyad, the kingdom’s third-largest bank by market capitalisation, fell to 899 million Saudi riyals (Dh880.5m) for the third quarter, short of analyst estimates, from 1.08 billion riyals in the same period last year.
Riyad’s loans and advances portfolio declined 1.92 per cent year-on-year to 138bn riyals for the quarter, while customer deposits fell 0.76 per cent to 160.4bn riyals.
The bank did not disclose revenues, as is common among Saudi lenders reporting provisional earnings.
Business activity across the kingdom’s banking sector is likely to have remained weak across the third quarter.
This is because of summer holidays, Eid holidays and part of Ramadan all falling within the quarter, according to a research note from EFG-Hermes.
The 40 per cent decline in trading volumes on the Saudi stock market during the period, coupled with a 19 per cent drop in the Tadawul Index, are likely to weigh on banks’ non-interest income, EFG said.
However, the picture was rosier at Banque Saudi Fransi, the kingdom’s fifth-largest bank by market capitalisation.
The bank reported a 10.2 per cent increase in profits for the quarter to 1.02bn riyals, coming in nearly 2 per cent ahead of analyst estimates, with loans and deposits rising 4.8 per cent and 9 per cent, respectively.
Riyad Bank’s shares declined 0.64 per cent to 13.87 riyals yesterday. Banque Saudi Fransi’s shares rose 2.9 per cent to 30.89 riyals.
jeverington@thenational.ae
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