SABB reported a resilient end to the year but disappointing bottom line financial performance, with a full year net loss before Zakat and income tax of SR4,302 million, which included the impairment of goodwill in the second quarter of SR7,418 million.
The underlying full year net income before Zakat and income tax was SR3,835 million, 13 percent lower than 2019 (on a pro forma basis), from lower revenue reflecting the cuts to benchmark interest rates partly offset by lower expected credit losses and reduced costs.
The gross loans and advances increased 1 percent during 2020 and the fourth quarter.
SABB closed the reporting period with robust levels of capital, liquidity and a strong funding base.
According to a statement, the integration of the merged bank and realization of synergies is on track.
Lubna Suliman Olayan, board chair of SABB, said: “2020 has been an eventful year with the COVID-19 global pandemic creating challenges and uncertainty, but despite this, we remained open for business, ensuring the safety of our customers and staff, and continued with our 2020 priorities.
“In 2020, we completed the integration of our corporate and institutional banking and treasury businesses, which enter 2021 operating as a single bank. Our retail and wealth management business will complete its customer integration, referred to as ‘Customer Day 1’ in the first quarter of 2021, following which we will be one bank, with one branch network, one IT system, one website and a shared culture. As we transition into life as truly one bank, our Strategy 2025 provides a roadmap to deliver on our vision of ‘bringing a world of financial opportunities to an ambitious Kingdom,’ and supporting the ambitious growth plans of the Kingdom’s Vision 2030 transformation plan.”
Despite the environment, the bank has developed its leadership position in the capital markets. This has been demonstrated through SABB’s Tier II sukuk issuance of SR5 billion, a range of industry awards recognizing the bank’s digital and mobile banking capabilities, and trade, treasury and cash management.
“Although there is uncertainty ahead, we look forward to approaching 2021 with the same commitment and perseverance that we have shown during 2020 and we are optimistic that global recovery will take place during the year ahead,” Olayan added.