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12 Saudi banks see higher net profits: Moody’s

Thu, Nov. 9, 2017
CAIRO – 9 November 2017: The rising net interest income has pushed net profits of 12 domestic Saudi banks to rise 3.2 percent in the first nine months of 2017, rendering the Saudi banking sector credit positive, Moody’s Investors Service said in a Thursday note.

Moody’s pointed out that these profits came despite the government’s measures to cut spending, which has resulted in lowering economic activities, lending growth and higher provisioning charges for banks.

“Three successive rate hikes by the U.S. Federal Reserve since December 2016, and the subsequent rise of lending rates by the Saudi Arabian Monetary Authority (SAMA), owing to the peg of the Saudi riyal to the U.S. dollar, allowed domestic banks to re-price their loans, which provided a boost to interest income,” Moody’s said.

The banks include Bank AlBilad, Riyadh Bank, Saudi Investment Bank and Bank Al-Jazira.

In the first nine months of 2017, operating expenses of banks went up one percent year-on-year, following a five percent increase in the same period in 2016.

As part of a massive crackdown on corruption in Saudi Arabia, which has seen the arrest of some of the Kingdom’s top private businessmen, Saudi Arabian banks have frozen more than 1,200 accounts belonging to individuals and companies in the Kingdom.
 
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