RIYADH, 14 July — The Saudi American Bank (SAMBA) has announced that its total deposits at the end of June 2002 stood at SR57.8 billion, registering an increase of SR397 million over the level at March 31.

“This modest net increase hides strong underlying growth in demand deposits of SR1.472 billion in the first six months of this year. Reorganization of our overseas operations has continued to lead to reduction in marginally profitable institutional deposits,” SAMBA’s Managing Director Mike de Graffenried observed on the bank’s half-yearly performance yesterday.

He said that although the net profits at SR963 million were 13 percent down on the same period last year, due in part to various non-recurring items, SAMBA’s annualized return on average assets for the first half of 2002 is 2.5 percent, and the annualized return on average equity 22.5 percent. The bank continues to enjoy great balance sheet strength with shareholders’ equity of SR8.8 billion supporting total assets of SR76.2 billion.

The bank said loans and advances as on June 30, 2002 were up eight percent over last year, with continued strong growth in the consumer and small business sectors. SAMBA’s new Islamic personal finance product, Al Khair, proved to be popular with its customers and stimulated growth in consumer assets.

Earnings per share for the half year were SR12.04 compared to SR13.86 for the same period last year. The interim dividend has been set at SR9 per share, net of zakah for shareholders. These results were impacted by a number of factors.

He said that in anticipation of the challenging business environment, a number of strategic cost management initiatives were put in place last year. As a result of these initiatives, operating costs, net of a “one time” write-down of properties have actually fallen by one percent compared with the first half of last year.

Recoveries of previously reserved debts have continued, but SAMBA’s stringent and conservative credit policies have called for the creation of new reserves.

Core operating margin for the first half of 2002 stood at SR1.041 billion against SR1.019 billion last year, representing a 2.2 percent increase. “SAMBA remains a highly profitable and efficient bank enjoying a strong customer franchise and great balance sheet strength. These are some of the qualities that allowed SAMBA to win the Euromoney ‘Best Bank in Saudi Arabia award for 2002 — the 9th time in the past ten years,” he adds.