India's luxury airline Vistara flies into the sunset    Netanyahu says he and Donald Trump 'see eye to eye' on Iran    Valencia government rules out resignations as anger grows over Spain flood response    Moscow targeted as Ukraine and Russia barrage each other with drone attacks    Haiti's prime minister ousted after six months    Rita Ora is tearful in tribute to Liam Payne at MTV Awards    Minister of National Guard inaugurates Riyadh Global Medical Biotechnology Summit 2024    GASTAT: Non-oil activities rise 5% in September    Prince Faisal meets Palestinian PM, Lebanese FM in Riyadh    Health practitioners arrested for posting indecent videos on social media    'Art of the Kingdom': First traveling exhibition of contemporary Saudi art launched in Rio de Janeiro    4-member gang transporting illegals busted in Riyadh    France to deploy 4,000 police officers for UEFA Nations League match against Israel    Month-long "Wonderland" festival to begin in Jeddah on Monday    Ghaznawi: 1,800 hotel rooms and 9,000 housing units to be made available in Historic Jeddah    Saudi Pro League: Al Qadsiah extend positive run with 2-0 win over Al Fayha    Al Nassr edges past Al Riyadh with Mane's goal to move up to third    Al Ahli continues strong form with 2-0 win over Al Raed in Saudi Pro League    Three charged in connection with Liam Payne's death    Dubai Design Week launches its 10th edition, celebrating creativity and innovation    India puts blockbuster Pakistani film on hold    The Vikings and the Islamic world    Filipino pilgrim's incredible evolution from an enemy of Islam to its staunch advocate    Muted Eid celebrations for millions of Nigerian Muslims    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Saudi banks see steady growth
Published in The Saudi Gazette on 04 - 07 - 2011

Saudi Arabia's banks are expected to maintain strong performance through 2011 as lending picks up and high public spending supports their business, the National Commercial Bank (NCB) said in a new study. The Kingdom's 12 commercial banks netted around SR26.7 billion in profits last year, nearly four percent above their 2009 income as a result of higher banking fees and lower provision allocations, the study said. "Overall, the Saudi banking system remains profitable with plenty of room to grow. As the global risk averseness continues to diminish, Saudi banks cautiously follow suit and deem eventually to expand their loans portfolios …. with over SR1 trillion deposits on balance sheets, and a range of lending opportunities in an expanding economy, banks are set for a profitable year, as seen in the first quarter with 5.6 percent growth in the industry's net income," the study said.
The report expected a recovery in 2011 for the brokerage business since trading volumes and credit activities have already picked up.
Foreign exchange and other operating income also posted a gain of around 6.6 percent, benefiting from higher remittances and efficiency.
"We expect this trend to continue for the remainder of 2011 and well in 2012. However, such record-low expense growth can rebound if banks' appetite for balance sheet expansion gains further momentum," NCB said.
Core operating revenues remained around SR52 billion, adding a mere SR295 million, growing 0.6 percent year-on-year in 2010.
Operating expenses gained only 2.5 percent in 2010, compared with 3.8 percent in 2009, indicative of increased cost control measures.
Return on average assets and return on equity for Saudi banks rose to 2.2 percent and 16.3 percent, respectively in the first quarter of 2011 from two percent and 14.7 percent by the end of 2010.
However, special commission expense recorded a staggering 49.3 percent drop due to the decline in cost of funds from 0.98 percent in 2009 to about 0.48 percent in 2010, the study said.
Besides, "banks need to address the asset liability maturity mismatch and diversify their funding base into dollars as well. In turn, they would be in a stronger position to seize the emerging lucrative opportunities, especially after the fall in provisions, which are already enhancing the income to cost ratio."
Total provisions stood at SR9.9 billion in 2010, nearly SR1.3 billion less than 2009. Investment provisions plunged by a massive 82 percent as banks shifted their investments to higher grade securities, the report said. Provisions for credit losses declined by only around 8.9 percent to SR9.5 billion.
"In fact, banks sought after more collaterals and increased their non-performing loans (NPLs) coverage ratio."
Functioning as a security cushion, collaterals increased by SR23 billion to SR168.7 billion, a 15.8 percent growth. NPLs contracted by 10 percent to SR23.2 billion, amounting to three percent of gross loans, higher than the 3.4 percent in 2009.
Meanwhile, Banque Saudi Fransi said bank credit to the private sector totaled SR767.9 billion in May, whereas credit to the public sector totaled a mere SR27.6 billion.


Clic here to read the story from its source.