NCB reports lowest quarterly profit in Q4 2009

Earnings at National Commercial Bank (NCB), the largest Saudi bank by assets, almost doubled last year despite a slowdown in lending, but its fourth quarter profit looked to have fallen to the lowest in a year.

State-owned NCB, which is slated for privatisation, made a net profit of SR4.04 billion (Dh3.9bn) in 2009, up from SR2.03bn in 2008, it said in a statement.

"This [rise in 2009 net profit] confirms the bank's ability to efficiently manage its assets and diversify its sources of income in spite of global economic challenges," it said.

The bank did not disclose a net profit for the fourth-quarter, which based on the annual and previous figures Reuters calculated to be about SR770 million, compared to a net loss of SR2.55bn a year earlier.

That would be NCB's lowest quarterly net profit in 2009.

Most Saudi banks posted poorer fourth-quarter and annual earnings for 2009 due mainly to the global economic slowdown and provisions for loan losses after multi-billion dollar debt defaults last year by some family-owned firms which made banks more meticulous on lending.

Banks more than tripled provisions against loan losses over the first nine months of 2009 to SR6.04bn.

NCB itself raised provisions for loan losses nine-fold over the same period to SR1.87bn.

The global economic slowdown coupled with a drop in oil revenues slowed the Saudi economy to the verge of contraction in 2009, likely eking out a growth of 0.15 percent compared to 4.3 per cent in 2008.

NCB said its loans rose four per cent in 2009, compared to 22.8 per cent in 2008, while deposits rose 17.9 per cent in 2009, down from a 20.3 per cent rise in 2008.

NCB began consolidating earnings last year of Islamic lender Turkiye Finans, after the Saudi bank paid $1.08 billion (Dh3.96bn) in 2007 for 60 per cent of the Turkish bank's capital. The Jeddah-based bank plans to sell shares to the public for the first time as part of a government plan to divest state assets. It has not yet set a date for an initial public offering.


ALINMA NET DOWN 85%

Newly-launched Saudi bank Alinma said yesterday its fourth-quarter net profit fell 85 per cent from the previous quarter due to increased operational costs.

The bank, which opened its first retail banking branches in July, made SR5.6 million (Dh5.46m) in the fourth quarter, compared to earnings of SR38.6m in the third-quarter.

Operational profits reached SR138m in the quarter, while deposits amounted to SR1.5 billion and investments stood at SR1bn. "The reason for the decline in the net profits for the fourth quarter... is increased operational costs of the media campaign and the cost of new branches," the bank said in a statement on the Tadawul website. (Reuters)


Al rajhi earnings up

Al Rajhi Bank, the Gulf's biggest Islamic lender by market value, posted a lower-than-expected 3.2 per cent rise in its net profit during the fourth quarter, a statement said.

Al Rajhi made SR1.47 billion (Dh1.43bn) in the three months to end-December compared to SR1.42bn in the same period a year ago, the bank said in a statement posted on the Tadawul website yesterday.

It was Al Rajhi's lowest quarterly net profit this year.

This was below analysts' expectations which ranged between SR1.61bn and SR1.96bn.

Earnings per share for all of 2009 was SR4.51, up from SR4.35 in 2008. (Reuters)

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