Riyad Bank reports 59% third quarter profit jump
The bank’s net profit in the nine-month period climbs to 4.5bn riyals
Saudi Arabia’s Riyad Bank, which is in talks to merge with National Commercial Bank, reported a 59 per cent year-on-year jump in its third-quarter net profit as operating income rose.
Net profit for the three-month period ending September 30 climbed to 1.51 billion Saudi riyals (Dh1.47bn), the lender said in a regulatory statement to the Tadawul stock exchange, where its shares trade. Revenue from special commissions and investments for the third quarter rose to 2.67bn riyals, a 24 per cent rise from a year earlier, it added.
"Our strong performance reflects the dedication and focus of our management team to make every effort to achieve the bank’s strategic objectives," the bank's chief executive, Tareq Al-Sadhan said.
The bank said the higher net profit was driven by the increase in operating income, as well as higher fee and commission income, and gains on disposals of non-trading investments.
The lender also said total operating expenses were 2.4 per cent lower, mainly due to lower impairment charges.
In the nine month period ending September 30, the bank’s net profit climbed 63 per cent year-on-year to 4.49bn riyals, mainly driven by higher net commission income and fee income.
The bank's assets increased to 250.57bn riyals in the nine month period of 2019, from 226bn riyals reported during the same period last year.
Riyad Bank’s loans and advances grew to 166.27bn riyals, a 14 per cent year-on-year rise, while customer deposits advanced 11.5 per cent to 177.67bn riyals.
The results for the first nine months of the year "demonstrates the impact ... the effective execution of the transformation programme is having on our business and financial results", Mr Al-Sadhan said. "We grew our retail and commercial portfolios, expanded our market share in targeted segments and delivered strong balance sheet and core income growth."
Riyad Bank and NCB, which counts Saudi Arabia’s sovereign wealth fund the Public Investment Fund among its shareholders, announced intentions to merge in December last year. If the proposed union goes ahead, it will create a financial institution with 748bn riyals in assets.
The potential deal, which is still under consultation, would be the second major bank merger in the kingdom, following that of Saudi British Bank and Alawwal Bank, subsidiaries of HSBC and Royal Bank of Scotland, respectively.
In a presentation to investors accompanying its results, Riyad Bank said it was the third-biggest retail bank in the kingdom in revenue terms, with a 7.6 per cent market share. NCB is the second-biggest, with a share of 22.2 per cent, while Al Rajhi Bank leads the retail market with a 30.6 per cent share.
Published: October 27, 2019 06:12 PM