JEDDAH, 12 February 2006 — Saudi Hollandi Bank (SHB) reported a record net profit of SR1.05 billion for the year ending Dec. 31, 2005. This is a 41.6 percent increase over the previous year. Total assets on Dec. 31, 2005 amounted to SR40 billion, an increase of 19.5 percent over the previous year, mainly attributable to loans and advances to customers that grew by 43 percent from SR16.6 billion to SR23.80 billion. Customer deposits grew by almost 20 percent to SR28.60 billion on Dec. 31, compared to SR23.9 billion on Dec. 31, 2004, while the bank’s investment portfolio, which is comprised of financial instruments denominated in Saudi riyals and US dollars, increased by 14.4 percent to SR10.5 billion.
Giel-Jan van der Tol, Saudi Hollandi Bank’s managing director, commented: “The significant increase in net earnings per share from SR29.47 to SR41.74, return on equity from 25.4 percent to 31.0 percent and return on assets from 2.4 percent to 2.9 percent demonstrate the bank’s ongoing commitment to providing competitive returns to shareholders. He added: “2005 was a uniquely challenging year in many respects. Favorable market conditions provided the opportunity to accelerate balance sheet growth across all business lines and stock market activity was the driver behind the significant growth in non-commission income. A no lesser challenge was the replacement of the core banking platform that was completed toward the end of the year involving the participation of almost everyone in the bank.”
He continued: “Our increased focus on the consumer banking market is progressively delivering higher dividends and we are pleased to see that our consumer lending book has shown record expansion in the 2nd half of 2005, supported by increased sales of credit cards. The Van Gogh Preferred Banking customer base continues to grow in line with our expectations.”
“SHB is a leader in the corporate banking segment. The structured finance & syndications team secured several major transactions in the petrochemical and telecom sectors. The corporate finance team plays an increasingly important role in growing the bank’s revenue base. During 2005 SHB won several mandates as financial adviser and arranger in relation to upcoming initial public offerings (IPO’s). Such mandates reinforce the bank’s resolve to be a key player in Saudi capital markets. We have also complemented the investment banking team with the appointment of Saudi and international experts, who provide our customers with top class consultation and advisory services,” Van der Tol said. Looking ahead, he commented, “The bank’s results for 2005 are solid in absolute terms and the implementation of our new core banking system is expected to greatly enhance our capabilities to provide our valued clients with high standards of service. With the quality of people on board, state-of-the-art technology and improved processes, the bank is well positioned to significantly enhance its relative stand in the Saudi banking sector in 2006 in terms of profit and shareholder value growth.”
In recognition of the strong results for the year, the board of directors decided in its meeting held in Riyadh on Jan. 21, 2006, to recommend to the extra-ordinary general assembly of shareholders scheduled to be held on March 14, a net dividend of SR7.50 per share for the second half of 2005. This will bring the total dividends paid to shareholders for the year to SR15 per share. The board will also recommend to award three bonus shares for every four shares held subject to the necessary approvals from the regulatory authorities. The managing director extended his gratitude and appreciation to the regulatory authorities represented in the Saudi Arabian Monetary Agency, the Capital Market Authority, the Ministry of Finance and the Ministry of Commerce for their continued support, to customers for their constant loyalty to Saudi Hollandi Bank, and to the staff for their commitment and contribution to the bank’s success.