Saudi Arabia’s banks netted nearly SR9.3 billion (Dh9.2 billion) in the first quarter of 2013 after achieving their second highest income in 2012.
Analysts expect the Gulf Kingdom’s 12 banks, which control the second largest Arab asset base after UAE banks, to perform well through 2013 as they benefit from recovering lending, strong economic performance and a record state budget.
“Our expectations are that Saudi banks will record another good year thanks to high public spending, expanding lending and an upturn in the domestic economy…that was the case in 2012,” said an economist at a Saudi bank in Riyadh.
Figures by the Saudi Arabian Monetary Agency (SAMA), the country’s central bank, showed the net profits of banks stood at around SR3.25 billion in January 2013 and nearly SR2.99 billion in February. They picked up to SR3.05 billion in March.
Saudi banks profited around SR33.5 (Dh33.2 billion) in 2012, their second highest profits since the 2006 record income.
The profits last year was nearly 8.4 per cent above the 2011 net earnings of around SR30.9 billion but the profit growth in 2012 was much slower than in 2011, when it stood at around 18.3 per cent.
The increase in profits followed negative growth ion 2008-2010 because of the 2008 global fiscal distress and the ensuing debt default crisis in the Gulf kingdom, the world’s top oil supplier and largest Arab economy.
Slackening domestic credit allied with a rise in bad loan provisions to trim Saudi banks’ net profits to around SR29.2 billion in 2008 from SR30.2 billion in 2007. Profits continued their fall to reach SR26.8 billion in 2009 and SR26.1 billion in 2010 before rebounding in the following two years.
Saudi banks have the second largest asset base in the Arab region after UAE banks, with their combined assets standing at SR1.74 trillion (Dh1.73 trillion) at the end of 2012 against about Dh1.79 trillion for UAE banks.
Emirates 24|7
