Saudi Arabia's 12 commercial banks registered 37.5 percent increase in their aggregate net earnings in the third quarter of 2011. The combined net profits of the Kingdom's 12 commercial bank stood at nearly SR8 billion in the third quarter and the income is projected to remain high through the year, the National Commercial Bank (NCB) said. The banks maintained their growth, with their total assets expanding by nearly 0.6 percent YoY with NCB holding the biggest share at around SR307 billion. Deposits continued to grow at a faster pace than loans validated by 3Q11's 11.3 percent and 9.7 percent YoY, respectively. However, loans-to-deposits ratio stands at 75.4 percent against 76.5 percent during the same period last year. All banks recorded gains, some with quadruple digit growth rates, except for Saudi Investment Bank, which suffered from a 9.7 percent percent due to lower fees income, which it said plunged by nearly 14 percent in the third quarter. The Saudi banks' balance sheets showed their consolidated net profits stood at around SR26.1 billion in 2010, slightly lower than the 2009 earnings of nearly SR26.8 billion. Profits totaled SR29.9 bilion in 2008 and peaked at SR30.2 billion in 2007. "As we end the third quarter of 2011, banks have announced their profitability with exceptional performances," NCB study said. "We expect banks to continue growing their income levels as contract awards gained a staggering 156 percent during the first half of 2011 Y/Y…this will provide ample financing opportunities as projects in infrastructure, power, and real estate will seek local lending." "Since the beginning of 2011, Saudi banks have netted nearly SR24 billion, a 19 percent increase over the same period of 2010," NCB said. It added "Saudi banks will need to continue deploying their liquid assets through the rest of 2011 and into 2012 in order to maintain their profitable momentum." The banks' performance would improve further amid higher economic growth, with the Kingdom's GDP expected to grow 7.1 percent in 2011, Jadwa Investment said in its latest Saudi economic forecast.
