Saturday, Jul 16, 2011
0800 GMT [Zawya Dow Jones]--Saudi banks continued an earnings recovery in the second quarter that still led to disappointing dividends, says Morgan Stanley in a note. The investment bank notes that aggregate earnings in the seven largest quoted banks grew 9% year on year in the second quarter as provisions normalized, and that sector loan growth accelerated to 2.9% over the first quarter. However, "interim dividend cuts may disappoint," it says. "We were surprised to see Riyad, Al Rajhi and Samba cutting interim dividends (-12% YoY on average) as earnings recover. Given already high capitalisation and having maintained/increased payouts in 2009 and 2010, which were arguably much more difficult years, the reason behind the cut seems unclear."
(angus.mcdowall@dowjones.com)
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(END) Dow Jones Newswires
16-07-11 0801GMT
