RIYADH, 9 July  — Saudi American Bank announced yesterday a record SR1.109 billion profit for the first half of 2001, up almost 13 percent on the same period last year. The result was driven by an 11 percent surge in revenues, which stood at SR1.627 billion.

“In highly liquid market conditions total assets fell to SR76 billion, slightly lower than at the end of the half year 2000 due to weak demand for loans and continued reductions in borrowings from other banks. On the same basis, customer deposits, at SR57 billion, were up seven percent,” the bank said in a press statement.

It said SAMBA has a strong equity base by both local and international standards. Shareholders funds at mid-year amounted to SR8.5 billion representing over 11 percent of total assets.

The report said SAMBA recently inaugurated its Internet Banking services for customers (sambaonline) that allows its retail banking customers access to more than 47 services from the comfort of their home.

“The new service has proved to be popular with customers who are signing up in large numbers. The service can be found at www.sambaonline.com or www.samba.com.”

The report said operating expenses, excluding credit costs, for the half year were SR533 million, an increase of 7.4 percent over the same period last year.

“The rate of increase in expenses is significantly lower than the rate of growth in revenues, and as a result, SAMBA’s revenues continue to exceed 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 streams, in particular to convert products and services to be provided on the Internet,”  the report said.

Turning to the balance sheet, the bank said its total assets reached SR 76 billion, slightly down on the same period last year, mainly due to a fall of SR 4.2 billion (35 percent) in borrowings from banks. Compared with the same time last year, deposits are up by seven percent at SR57.2 billion. Samba is now a net lender to other banks for the first time since the merger with the United Saudi Bank in July 1999.

In line with economic conditions in the Kingdom, demand for loans and advances remains soft. Samba’s loan portfolio remains at SR 30 billion, down 9 percent on a year on year basis, due in part to Samba’s full compliance with the new accounting standards introduced this year, it adds.