RIYADH, 11 April 2006 — Saudi Arabia’s largest listed bank Al Rajhi posted a first-quarter net profit of SR1.75 billion ($467 million) yesterday, up 87.5 percent from a year ago and in line with analysts forecasts. First-quarter return on shareholders’ equity reached 50 percent and operating income stood at SR2.3 billion, the bank said in a statement. It gave no comparative figures.
Bakheet Financial Advisors had forecast Al Rajhi’s net profit in the first quarter of 2006 increasing 87 percent to SR1.75 billion.
Analysts fear this year’s downturn in the stock market could hit Saudi bank earnings, although first quarter results have proven to be strong.
The downturn began on Feb. 26 and was preceded by a record breaking rally. Around 40 percent of Saudi banks’ income in 2005 came from non-lending operations, such as brokerage activity, asset management and fees from share offerings.
Al Rajhi’s profits reflect the bank’s “diversified activities with offers to customers of several products...mainly in the investment field”, the statement quoted Chief Executive Officer Abdullah Al-Suleiman Al-Rajhi as saying. The bank launched an equity investment fund for China and India this year and plans to launch another one for emerging markets.