Saudi NCB, Samba post profits, diverge on provisions

That topped the 2.4 billion expected by EFG Hermes analysts but fell short of the 3.28 billion forecast by FAB Secu
17 May, 2020
  • That topped the 2.4 billion expected by EFG Hermes analysts but fell short of the 3.28 billion forecast by FAB Securities.
  • Its net impairment charges for expected credit losses rose to 396 million riyals from 145 million a year earlier.

Net profit rose to 2.83 billion riyals ($745.5 million) for the quarter to March 31.

That topped the 2.4 billion expected by EFG Hermes analysts but fell short of the 3.28 billion forecast by FAB Securities.

NCB said operating income rose by 7.2% mainly on higher net special commission income which for Islamic lenders is comparable to net interest income.

Its net impairment charges for expected credit losses rose to 396 million riyals from 145 million a year earlier.

NCB's investment-related income, fees from banking and services and foreign exchange income also rose.

SAMBA PROFIT JUMP

Samba Financial Group reported a 19.6% jump in first-quarter net profit to 1.27 billion riyals.

That topped the 889 million riyals forecast by EFG Hermes analysts who noted Samba lowered its provisions to 225 million riyals from 321 million a year earlier. EFG had estimated Samba's provisions at 328 million.

"Provisioning surprised positively," EFG said in a note.

Samba said the rise was mainly due to an increase in gains on fair value through other comprehensive income debt, exchange income and other operating income.

"On the other hand total operating expenses increased mainly due to an increase in salaries and employee-related expenses, depreciation and other general and administrative expenses," it said in a bourse filing.

Rating agency Moody's said this month that Saudi government spending cuts stemming from lower oil prices would weigh on the non-oil sector of the economy where banks do most of their business.

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