Saudi Arabian shares fell yesterday driven by banks such as Islamic lender Alinma Bank, which reported a first-quarter loss.
Saudi Arabia's Tadawul All Share Index declined 0.1 per cent to 6882.01, the lowest in a week.
Alinma reported a first-quarter loss of SR75 million (Dh73.4m), from a profit a year ago. The shares declined for a fifth day, shedding 1.2 per cent to SR12.45. Al Rajhi Bank, the biggest bank in the kingdom by market value, fell 0.9 per cent to SR84, the lowest in ten days. The second biggest lender, Samba Financial Group, had its biggest drop since March 29, losing 1.2 per cent SR60.25.
"There is a possibility that future earnings growth will be impacted because of the lack of balance sheet growth or loan growth. There is some negative sentiment on banks," said Murad Ansari, a Riyadh-based equity analyst at EFG Hermes KSA.
Increased provisions for bad loans and tightened lending have hurt earnings at Saudi banks since the global credit crisis and economic slowdown. Saudi British Bank, the lender 40 per cent owned by HSBC Holdings, and Saudi Hollandi Bank, part owned by ABN Amro Holding, reported declines in quarterly income.
Banque Saudi Fransi, a unit of France's Credit Agricole, had its biggest gain since March 3, rising 1.7 per cent to SR46.8, after it reported yesterday a 3.6 per cent decline in first- quarter net income. The bank's chief economist John Sfakianakis told Al Arabiya television channel that the bank's provisions for non-performing loans "are no longer high".
Saudi Cement Company, the second- largest seller of building materials in the kingdom by assets, said first-quarter profit rose 16 per cent as sales increased in the kingdom. Net income gained to SR176.6m, or SR1.73 a share, from SR152m, or SR1.49 a share, in the year-earlier period, the company said in a statement on the Saudi bourse yesterday.
Sabic, the world's biggest petrochemical maker, posted a first-quarter profit. Net income was SR5.43 billion, or SR1.81 a share.