Al Rajhi’s Q1 profit rises 33pc, beats forecasts

Reuters

Al Rajhi Bank, Saudi Arabia’s second-largest lender by assets, reported a 32.8 percent rise in first-quarter net profit on Sunday, beating analyst forecasts as it cut wage costs and fee income increased.
The bank made a profit of 2.02 billion riyals ($538.7 million) in the three months to March 31, up from 1.52 billion riyals in the same period a year earlier, it said in a bourse statement.
Six analysts, who were surveyed, had on average forecast the bank’s quarterly profit would be 1.84 billion riyals.
Al Rajhi said its profit rise was mainly due to higher fee income and increased financing and investment income. Total operating expenses also fell by 11.9 percent because of a reduced wage bill and lower general costs, it said.
Quarterly operating income rose 8 percent versus the corresponding period of 2015 to 3.7 billion riyals, while profit from special commissions increased 4.5 percent over the same timeframe to 2.57 billion riyals.
Loans and advances at the end of March stood at 216.4 billion riyals, up 5.5 percent on the same point of 2015, while deposits dipped 1.4 percent to 264.8 billion riyals over the same period.
The Al Rajhi Bank is a Saudi Arabian bank and the world’s largest Islamic bank by capital based on 2006 data. The bank is a major investor in Saudi Arabia’s business and is one of the largest joint stock companies in the Kingdom, with a paid up capital of Saudi riyal 16.25 billion. Its head office is located in Riyadh and there are six regional offices. Al Rajhi Bank also has 24 branches in Malaysia.
Al Rajhi Bank is considered one of the major joint stock banking and investment companies with a 100 percent Saudi capital initiated by Saudi riyal 750 million, then doubled to Saudi riyal 1500 million and a stock grant and split upto Saudi riyal 2,250 million took place.
The capital doubled again to reach Saudi riyal 4,500 million and also a stock grant and split upto Saudi riyal 6,750 million took place. The capital doubled a third time to reach Saudi riyal 13,500 million. And in 2008, the capital was increased to become Saudi riyal 15 billion. During the year 2014, the bank’s capital increased to Saudi riyal 16.25 billion.
In 2006 – nearly after 50 years of operation solely within Saudi Arabia – the bank launched in Malaysia, signifying its first foray into international banking. Following the Saudi business model which adheres closely to the deeply rooted Islamic banking principles, the Sharia-compliant banking group is planning to be instrumental in bridging the gap between modern financial demands and intrinsic Islamic values, for the numerous industry standards and development in Malaysia.
Further regional expansion has seen the 2010 opening of a national office, men’s branch and separate ladies’ branch in Kuwait. Followed by the 2011 launch of a national office and branches in Jordan.