RIYADH, 28 April — The Saudi American Bank (SAMBA) has announced a record profit of SR528 million, up almost ten percent over the same period last year. As a result, there was an increase of around 13 percent in revenues during the same period.
A press release issued by SAMBA’s board of directors for the quarter ending March 31 said the bank’s total assets stood at SR77 billion, one percent higher than at the end of the first quarter 2000. On the same basis, customer deposits, at SR56 billion, were up over six percent.
It said SAMBA has a strong equity base by both local and international standards. Shareholders funds at the first quarter amounted to SR8.8 billion representing over 11 percent of the total assets.
The release said SAMBA’s profit of SR528 million for the first quarter exceeded the profit for the same period in 2000 by 9.9 percent. This is the fourth quarter in succession that SAMBA has reported quarterly profits exceeding SR500 million. The bank’s earnings per share for the first quarter were SR6.61 compared to SR6.01 last year.
Revenues continued to maintain their upward trend. They stood at SR819 million, up 13 percent over the corresponding period of last year. At SR632.7 million, the net special commission income was up 11 percent on the first quarter of 2000.
Operating expenses for the quarterly period were SR263 million. “The quarter on quarter rate of increase in expenses is significantly lower than the rate of growth in revenues, and as a result, SAMBA’s revenues exceeded operating expenses by a ratio of more than 3 to 1. Much of the increase in expenses relates to the costs of developing new businesses and revenue stream, particularly in the e-commerce sector,” the release said.
The board of directors observed: “ Our credit costs are low and have been reduced by collections against the non-performing loan portfolio, resulting in a net charge of only SR28 million for the first quarter.”
Turning to the balance sheet, the press release said total assets reached SR77 billion, up by over one percent from the position as on March 31, 2000. Compared with the same period last year, deposits were up 6.4 percent at SR56.4 billion.
The board said such an outstanding performance allowed a net reduction in borrowing from other banks of SR3.3 billion, or 83 percent of the total at the first quarter of 2000.
“Our financial statements are in full compliance with the rigorous requirements of a new accounting standard introduced this quarter, and the impact of the adoption of this standard on our credit and investment portfolios has been reflected in our net equity of SR8.8 billion.
This is in line with our traditional conservative accounting policies and ensures that we remain very adequately covered against any adverse movement in these portfolios.”
According to the statement, demand for loans and advances has been soft in line with the economic conditions in the Kingdom. Despite this, SAMBA’s loan portfolio remained at SR30 billion, flat on a year on year basis.
The bank said SAMBA had SR8.7 billion in average equity during the first quarter of 2001. Its profits of SR528 million generated an annualized return on equity of 24.3 percent. For 2000 the equivalent figure was 23.8 percent.
“Revenues have been substantially increased and operating and credit costs have been well controlled, and SAMBA’s profits as a percentage of revenues is well over 64 percent. Our return on assets in the first quarter has increased from 2.5 percent in 2000 to an annualized 2.7 percent. Both ratios well exceed 2000 market averages. Our aim is to continue to grow return on assets by defending and maintaining our strong market shares in loans and investments while increasing our share of profits,” the statement adds.