RIYADH, 11 July 2007 — SABB recorded a net profit for the six months ended June 30 of SR1.251 billion — down SR558 million or 30.8 percent, compared with SR1.809 billion for the same period in 2006. However, net profit for the three months ended June 30 amounted to SR635 million, down SR188 million or 22.8 percent, compared with SR823 million for the same period in 2006.
Earnings per share of SR3.34 for the six months ended June 30 — down 30.8 percent from SR4.82 for the same period in 2006.
Operating income of SR2.055 billion for the six months ended June 30 — down SR573 million or 21.8 percent, compared with SR2.628 billion for the same period in 2006. Net profit for the first half of 2007, increased by 1.6 percent, compared with the achieved results for the second half of 2006. Cost base — except for provision for possible credit losses — has reduced by SR91 million or 12.4 percent.
Customer deposits of SR65.2 billion at June 30 — up SR10.1 billion, or 18.3 percent, compared with SR55.1 billion at 30 June 2006.
Loans and advances to customers amounted to SR48.6 billion at June — up SR9.5 billion or 24.3 percent, from SR39.1 billion at June 30. The bank’s investment portfolio totaled SR16.4 billion at June 30 compared with SR15.3 billion at June 30.
The bank’s total assets amounted to SR85.1 billion at June 30 — an increase of SR12.3 billion or 16.9 percent, over June 30, 2006. SABB board of directors has recommended an interim dividend of SR1.50 per share for the first half of 2007, after the deduction of Zakat.
John Coverdale, managing director of SABB, said: “I am greatly encouraged by the progress that SABB has made during the first half of 2007 especially with regard to core banking activities. The 24.3 percent increase in loans and advances compared to June 30 together with customer deposit growth, has generated a sustainable SR221 million or 17.3 percent increase in net interest income and positions SABB well for the future. Brokerage and mutual funds business continues to be subdued, significantly reducing SABB’s first half 2007 profits, but core-banking non-funds income has grown by SR28 million or 9.2 percent compared to the first half of 2006.”
“Our cost base has reduced by SR91 million or 12.4 percent due to last year’s one-off cost of re-branding the bank and lower 2007 profit related bonus accruals. Increased bad debts reflect growth in our card and consumer loan book and our penetration of new markets sectors. However, overall credit quality is sound, supported by the strong underlying Saudi economy that is also helping to drive high levels of corporate activity, particularly in the construction and infrastructure development sectors.” Coverdale added: “The market remains very liquid but SABB has effectively used the increase in customer deposits over the last year to fund loan growth. The bank’s capital and liquidity positions remain strong.”
“We are pleased to announce that our insurance company, SABB Takaful, has obtained all necessary operating authorizations and began trading on July 1 July. This, together with the 2006 formation of the Investment Bank Saudi Arabia, is a major step toward our goal of becoming a comprehensive provider of financial services to our clients within the Kingdom.”
“We thank our customers for their continued support, and our staff for their commitment and contribution to the bank’s success.”