RIYADH, 22 April 2007 — Saudi Hollandi Bank (SHB) reported a net profit of SR215.4 million for the quarter ended March 31, 2007 compared to SR313.7 million for the same quarter last year, a decline of 31 percent. The net result was 26 percent lower than the fourth quarter of 2006.
Managing Director Giel-Jan van der Tol said the net result for the quarter was impacted by a SR99.5 million (or 53 percent) decrease in fees from banking services which amounted to SR87.6 million compared to SR187.1 million last year. This was mainly on account of lower brokerage fees following the developments in the local stock market. Consequently, operating profit was down 12.7 percent compared to the same period last year. Compared to the previous quarter, the operating result was SR43.8 million, or 14 percent lower, largely due to a reduction in syndication, mediation and asset management fees.
However, total assets stood at SR48.5 billion against SR42.7 billion at the end of the first quarter in 2006, representing an increase of 13.3 percent. Customer deposits grew by 6.4 percent to SR32.4 billion by end of 2007’s first quarter. Loans and advances increased by 4.4 percent to reach SR26.6 billion compared to SR25.4 billion over the same quarter last year.
Earlier this year, SHB increased its capital from SR2.205 billion to SR2.646 billion to meet its expanding business needs.
Shareholders’ equity increased by 19.6 percent from SR3.7 billion to SR4.4 billion. Return on equity for the first quarter 2007 was 20.0 percent versus 34.4 percent in the first quarter 2006.
Return on assets recorded 1.83 percent as against 3.08 in first quarter of 2006, while earnings per share reduced by 31.9 percent from SR1.19 last year to SR0.81 this year’s quarter.
Van der Tol added that during the first quarter of 2007, the bank launched its new “Destination Growth” strategy aimed at expanding its corporate banking, investment banking, consumer banking and asset management businesses. This growth plan consists of a large number of strategic initiatives, including the expansion of its branch network, ATMs and POS networks, and the widening and deepening of its product range in combination with further modernization of its banking systems.