Saudi Al Rajhi Bank and Riyad Bank see jump in Q2 net profit

Strong results push bank index higher on Tadawul Sunday

Saudi traders monitor stock information at the Saudi stock market in Riyadh, Saudi Arabia August 25, 2020.

Saudi traders monitor stock information at the Saudi stock market in Riyadh, Saudi Arabia August 25, 2020.

REUTERS/Ahmed Yosri

Saudi Arabia’s biggest retail lender and the largest Islamic lender in the world, Al Rajhi Bank, reported a quarterly net profit of 3.60 billion riyals ($960 million) for the first half of 2021, up 48 percent from 2.436 billion riyals in the year-ago period.

Meanwhile, Riyad Bank saw its Q2 net profit rise 42 percent y-o-y to 1.51 billion compared to 1.06 billion riyals. 

The strong results among lenders had pushed the bank index on Tadawul up 0.6 percent before noon Sunday. Al Rajhi Bank was trading 1.4 percent higher at 112.60 riyals and Riyad Bank was 0.4 percent higher at 26.30 riyals.

In a filing to the Saudi Tadawul exchange, Al Rajhi Bank attributed the jump in profit to a 32 percent increase in total operating income on higher net financing and investment income, and fees from banking services and exchange income.

However, impairment charges rose 27.5 percent to 584 million riyals.

For Al Rajhi Bank H1-2021 net profit rose 44 percent to 6.94 billion riyals.

Riyad Bank in a disclosure said the 42 percent jump in its quarterly net profit was mainly due to higher total operating income coupled with lower total operating expenses.

The total operating expenses fell by over 16 percent due to lower impairment charge for credit losses. This was however partially offset by higher other general and administrative expenses and salaries and employee-related expenses.

For H1-2021, Riyad Bank reported a net profit of 2.865 billion, up 13 percent on year.

(Reporting by Brinda Darasha; editing by Daniel Luiz)

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© ZAWYA 2021

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