Maaden posts SR370.8m net profit

Updated 15 July 2014
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Maaden posts SR370.8m net profit

DUBAI: Saudi Arabian Mining Co. (Maaden) posted a higher-than-expected nine-fold rise in net profit in the second quarter, recovering from last year's poor performance as sales increased and aluminum prices rose.
The miner made a net SR370.8 million ($98.9 million) in the three months to June 30, compared with SR40.98 million in the year-earlier period, it said in a bourse filing on Tuesday.
Earnings were expected to improve because of a slump which Maaden suffered in the second quarter of 2013, due to a plant shutdown and lower gold prices. But its performance exceeded the expectations of all four analysts polled by Reuters, who had on average forecast 183.8 million.
Maaden is seen as a key driver of Saudi Arabia's economic diversification away from oil exports, with its $9 billion Waad Al-Shimal project expected to produce up to 16 million tons a year of numerous phosphate products when it comes on line in late 2016.
The company cited increased sales across its product range as well as higher aluminum prices for the profit increase, which helped offset lower prices for ammonia and one of its fertilizer products.
Maaden gave no further detail. Saudi companies usually issue brief earnings statements early in the reporting period before publishing more information later.
The profit increase reverses a broadly negative earnings run for the company, which had reported declining profits in four of the previous five quarters - with the outlying quarter positive largely due to a one-off gain on a joint venture.
The company signed $5 billion of loan financing for the Waad Al-Shimal scheme last month and is set to use much of the proceeds of a $1.5 billion rights issue, plans for which were announced in May, to fund the project.


Fintech makes inroads in US banking market, but revenue share minimal — Accenture

Updated 41 min 19 sec ago
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Fintech makes inroads in US banking market, but revenue share minimal — Accenture

  • Around 19 percent of financial institutions in the US are new entrants, such as challenger banks, non-bank payments institutions and big tech companies
  • New entrants account for 63 percent of financial players in the UK

NEW YORK: Financial technology startups and other new entrants are making inroads in the US banking market, but have yet to capture a threatening share of bank revenues, according to research published by Accenture on Wednesday.
Around 19 percent of financial institutions in the US are new entrants, such as challenger banks, non-bank payments institutions and big tech companies, according to the report. Yet they have amassed only 3.5 percent of the total $1.04 trillion in banking and payment revenues so-far, Accenture found.
In the UK, new entrants have made a larger dent, having captured 14 percent of the total €206 billion ($238.45 billion) in industry revenues, with the majority going to non-bank payments companies, according to the report.
Accenture assessed more than 20,000 banking and payments institutions across seven markets around the world to determine the level of change that digital technologies have brought about in banking.
Since the financial downturn, a growing number of companies across the world have sought to position themselves as cheaper and more user-friendly alternatives to banks by making better use of new technology.
Banking and payments institutions have decreased by nearly 20 percent from 2005 to 2017. Still, one in six current institutions is what Accenture considers a new entrant, or companies that have entered the market since 2005.
Their impact has varied by geography.
Tougher regulations and greater dominance of large banks have made the US a more difficult market for new entrants in areas excluding payments, Alan McIntyre, head of Accenture’s global banking practice, said in an interview.
“You still have a very robust banking market in the US,” McIntyre said.
More than half of new current accounts opened in the United States have been captured by three large banks, which have had more money to invest in digital than smaller regional players, he added.
In the UK the situation has been different, thanks in part to a push from regulators aimed at fostering greater competition in the financial sector and diminishing the dominance of large banks.
New entrants account for 63 percent of financial players in the UK, according to the report.
The report also found new entrants are taking over one third of new revenue, pointing to their potential to pose a greater competitive threat going forward.
In Europe, including the UK, 20 percent of banking and payments institutions are new entrants and have captured nearly 7 percent of total banking revenues, according to the report.