Al-Rajhi Bank posts SR2.05bn profit

Al-Rajhi Bank, Saudi Arabia's second-largest lender by assets, reported a 5.7 percent rise in its second-quarter net profit on Monday, broadly in line with analyst forecasts.
The bank made SR2.05 billion ($546.7 million) profit in the three months to June 30, up from SR1.94 billion in the same period a year earlier, it said in a bourse statement.
Five analysts surveyed by Reuters had on average forecast the bank's quarterly profit would be $2.07 billion.
The bank attributed the profit gain to a 10.3 percent year-on-year increase in net operating income to SR3.9 billion, which in turn was boosted by more income from financing and fee income from banking services.
This helped to offset a 16 percent jump in total operating expenses, which rose because of higher salaries expenses and impairment charges.
Saudi companies issue brief earnings statements early in the reporting period before publishing more detailed results later.
Saudi banks are facing a tougher operating environment as persistently low oil prices and a pullback in state spending gradually weigh on the economy. In previous years, Saudi banks were also able to build up hefty deposits as revenues garnered by the government from high oil prices were parked with lenders.
Instead, the government is using this revenue to help plug the budget deficit, straining liquidity in the banking system.
This was reflected in the 0.57 percent increase in deposits year on year, to stand at SR270.96 billion as of June 30. This compares with a 6.6 percent advance in total loans over the same timeframe to SR224.5 billion.

Source: Arab News