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Saudi banks net SR12.5b in 4 months

JEDDAH – Saudi Arabia’s 12 commercial banks netted nearly SR12.52 billion in the first four months of 2012, aided by high oil prices, strong economic performance and a surge in lending, data from the Saudi Arabian Monetary Agency showed.

The kingdom’s banks earned around SR3.46 billion in January, SR3.1 billion in February and about SR2.6 billion in March, a quarterly net earnings of nearly SR9.3 billion, the data revealed.

Net income stood at around SR3.1 billion in April. The figures showed the high earnings were a result of a surge in domestic credit as banks are slowing down their bad debt provision build up and taking advantage of an upswing in the economy and in public sector projects.

Sama’s figures showed banks’ claims on the private sector swelled by 13.3 percent year/on/year in April against 10.5 percent in the previous period. Lending grew by about 5.5 percent in 2010 and remained stagnant in 2009.

The banks’ profits in 2011 were 18 percent above the 2010 income and marked a return to profit growth by the banking sector in the Kingdom. Saudi banks netted their highest profits of SR34.6 billion in 2006 before the income slumped to SR30.2 billion in 2007.

Sama’s figures showed banks’ claims on the private sector swelled by 13.3 percent year/on/year in April against 10.5 percent in the previous period. Lending grew by about 5.5 percent in 2010 and remained stagnant in 2009.

According to Sama’s figures, the banks’ claims on the private sector increased by 13.3 per cent year/on/year in April as against 10.5 percent in the previous period. Lending increased by about 5.5 percent in 2010 and remained unchanged in 2009.

In the two years that followed the domestic default crisis, Saudi banks cut off a substantial portion of their income to accumulate provisions against non-performing loans, allocating an estimated SR20.4 billion.

Saudi banks come second to UAE banks in terms of asset bases in the Arab region. The combined assets of Saudi banks stands at SR1.60 trillion at the end of February against an estimated AED1.66 trillion for UAE banks.

The surge in credit followed a sharp slowdown in previous years in the wake of the 2008 global fiscal distress and debt default by two family businesses.

Slackening domestic credit allied with a surge in provisions to trim Saudi banks’ net profits to around SR26.8 billion in 2009 from SR29.9 billion in 2008. Profits again slipped to SR26.1 billion in 2010 before bouncing up to SR30.9 billion in 2011, their highest level since 2006 and the second highest in banks’ history.

The Saudi Gazette 2012, Jun 07 2012

http://www.zawya.com/