BSF posts SR2.8bn net income for 2010

Higher profits augmented the earnings per share (EPS) to SR3.87 for the year 2010 in comparison to SR3.42 reported last year.
The bank's net income attributable to common shareholders during Q4 2010 amounted to SR709 million, an increase of 119 percent compared to SR324 million earned during the same quarter last year. In comparison to the immediately preceding quarter (Q3 2010) net income registered a SR88 million (+14.17 percent) increase during Q4 2010.
Although suffering from unprecedented low interest rates levels, the bank's net special commission income (NSCI) for 2010 increased by SR16 million to reach SR3.066 billion in comparison to SR3.050 billion earned last year. This increase is due to the continued effort to grow the earning assets and at the same time managing carefully the cost of funding of the bank, which was helped by the gathering of more than SR2.3 billion additional customer deposits compared to last year with a positive improvement in the mix between commission and non-commission bearing deposits.
The NSCI for the Q4, 2010 amounted to SR789 million, an increase of SR21 million in comparison to same quarter last year and an increase of SR11 million in comparison to the immediately preceding quarter. The increase witnessed in NSCI represents continued growth in average earning assets and the effective management of funding costs.
It is noteworthy that the fee income increased by 6 percent from 2009 while brokerage revenues decreased due to a very slow equity market.
BSF's total operating income for 2010 amounted to SR4.395 billion, an increase of SR100 million in comparison to the SR4.295 billion reported for 2009.
With respect to Q4 2010, the bank registered a total operating income of SR1.084 billion, an increase of SR21 million compared to SR1.063 billion earned during Q4 2009. Total operating expenses for Q4 2010 amounted to SR377 million, a 48 percent reduction compared to the same quarter last year and a decrease of 19 percent compared to the preceding quarter (Q3 2010). The decrease in the operating expenses is attributable to improved financial discipline and reduction in loan loss provisions.
BSF's total assets as at Dec. 31, 2010 stood at SR123 billion, increasing by SR2 billion from SR121 billion as at Dec. 31, 2009.
Customer deposits at year end 2010 amounted to SR93.5 billion, from SR91.2 billion end of 2009. Demand deposits were the main driver behind the growth in customer deposits.
BSF's loans and advances as at Dec. 31, 2010 amounted to SR81 billion, an increase of SR3 billion compared to SR78 billion reported as at Dec. 31, 2009, thanks to a significant increase in retail banking assets.
BSF's Chairman Ibrahim Al-Touq commenting on Q4 2010 results stated: "The bank's fourth quarter results are in line with the management's expectations and continue to reflect BSF's ability to generate strong recurring revenues and profits without compromising at all on the risk profile of the bank, which is reflected by the International Capital Market in the credit spread of our debt instruments. There is no doubt that this will help to maintain for the future sound confidence with all our clients and further develop the bank's position as one of the strongest banks in the Kingdom."
Al-Touq highlighted that during the year BSF enhanced its capabilities and competencies in all core areas through significant investment in technology and professional training. He expressed his gratitude toward BSF customers for their trust and assured them that the bank will continue increasing its efforts in becoming the preferred banking solutions provider in the Kingdom.