RIYADH, 14 April 2005 — Saudi British Bank (SABB) said yesterday its first quarter net profit rose 25.1 percent, boosted by further strong growth in operating revenues in the Kingdom’s buoyant, oil-driven economy.
The bank, which is 40 percent owned by British-based HSBC Holdings Plc, said net profit in the first three months of 2005 increased to SR456 million ($122 million) from a revised SR364 million a year before.
“Operating revenues are well above 2004 levels, with particularly strong growth in non-funds income which has continued to benefit from a strong local equity market,” Managing Director Geoff Calvert said.
The results came just after the close of Wednesday morning’s trading session on the Arab world’s biggest bourse. SABB shares ended the session at SR1,088, barely changed from Tuesday’s close of SR1.087.50.
SABB said increases in loans and advances outpaced growth in customer deposits, with loans rising 18.6 percent to SR32.3 billion and deposits up 13.8 percent at SR42.3 billion.
The growth in loans pushed SABB’s loans/deposit ratio up to 76 percent, significantly over the 70 percent preferred level indicated by the Saudi Arabian Monetary Agency (SAMA). “Our loan portfolio remains sound and this is reflected in the low provision for credit losses. Capital and liquidity positions remain strong,” Calvert said.
SABB’s investment portfolio fell to SR16.4 billion from SR17.4 billion a year earlier, the bank said.
Earnings per share increased to SR9.12 compared to SR7.29 for the first quarter of 2004. Total assets rose 15.8 percent to SR57.7 billion, it said.
SABB is Saudi Arabia’s fourth-biggest listed bank in terms of market capitalization, accounting for 3.4 percent of the total capitalization on the bourse.
In March it launched a $600 million five-year Eurobond, the first Eurobond issued by a Saudi company. Economists say Saudi banks are looking to secure longer-term funding to help position themselves to finance a raft of power, water and mining projects planned in Saudi Arabia worth tens of billions of dollars.
Last April SABB reported first quarter net profits of SR359 million but the figure was raised to SR364 million to reflect adoption of revised accounting standards, the bank said.