Saudi banks net SR12.44bn

Saudi Arabia’s banks netted nearly SR12.44 billion (Dh12.3 billion) in the first four months of 2013 and analysts expect another good year for the banks because of an economic upswing and rebounding credit.

The Gulf Kingdom’s 12 commercial banks netted their second highest annual income in 2012 and profits could be even higher this year, they said.

“Banks’ performance in the first quarter of this year was good and I think they are heading for another good year through 2013,” a Riyadh-based analyst said.

“The main reasons are that domestic credit is picking up while banks also benefit from a surge in government contracts and a strong economic mood.”

Figures by the Saudi Arabian Monetary Agency (SAMA), central bank, showed the net profits of the banks stood at around SR3.25 billion in January 2013, nearly SR2.99 billion in February and SR3.05 billion in March. They picked up to around SR3.13 billion in April.

Saudi banks profited nearly SR33.5 (Dh33.2 billion) in 2012, their second highest profits since the 2006 record income.

The profits last year was nearly 8.4 per cent above the 2011 net earnings of around SR30.9 billion but the profit growth in 2012 was much slower than in 2011, when it stood at around 18.3 per cent.

The increase in profits followed negative growth in 2008-2010 because of the 2008 global fiscal distress and the ensuing debt default crisis that hit two key family businesses in the world’s largest oil exporter.

Slackening domestic credit allied with a rise in bad loan provisions to trim Saudi banks’ net profits to around SR29.2 billion in 2008 from SR30.2 billion in 2007. Profits continued their fall to reach SR26.8 billion in 2009 and SR26.1 billion in 2010 before rebounding in the following two years.

SAMA’s data showed credit continued to record robust growth after the post-crisis slowdown, with banks’ claims on the private sector rising by around 15.9 per cent year-on-year in April 2013. In the first four months, lending grew by nearly 5.5 per cent to SR1,054 billion from SR999 billion at the end of 2012.

Follow Emirates 24|7 on Google News.