Saudi Arabia’s largest listed lender, National Commercial Bank (NCB), reported a 3.2 per cent increase in second-quarter net profit on Sunday, which was at the low end of analysts’ forecasts.
The bank made a net profit of 2.44 billion Saudi riyals (Dh2.3bn) in the three months to June 30, up from 2.36bn riyals in the same period last year, it said in a bourse statement.
Four analysts had forecast on average that NCB would make a quarterly profit of 2.54bn riyals.
Saudi companies issue brief earnings statements early in the reporting period, before publishing more detailed results later.
Deposits at the bank, which has close links to the government, shrank by 12.8 per cent year on year to 314.7bn riyals at the end of June, continuing a decline from the first three months this year.
Lower oil prices are forcing Saudi lenders to adjust to tighter liquidity, as the government uses revenue previously placed as deposits with banks to help plug its budget deficit.
The trend contrasts with previous years, when Saudi banks were able to build up hefty deposits from revenue earned by the government from high oil prices.
Loans and advances at the end of last month stood at 264.7bn riyals, up 13 per cent on a year earlier.
Its quarterly operating income rose by 6.8 per cent to 9.3bn riyals, while profits from special commissions increased by 9.1 per cent to 6.7bn riyals.
The bank plans to expand overseas, growing its Turkey franchise while exploring new markets such as Malaysia, Indonesia and Egypt, its chairman, Mansour Al Maiman, has said.
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