Saudi bank deposit growth accelerated to 11-month high in February

Saudi bank deposit growth accelerated to 11-month high in February
SAMA bank deposit data for February reflected higher oil prices and a strengthening economy. (Supplied)
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Updated 23 April 2021

Saudi bank deposit growth accelerated to 11-month high in February

Saudi bank deposit growth accelerated to 11-month high in February
  • Bank deposit growth was the fastest since March 2020

RIYADH: Bank deposits in Saudi Arabia grew during February at the fastest pace since March 2020 as the economy continued to rebound from the coronavirus pandemic.

Deposits reached SR1.96 trillion ($522.5 billion) at the end of February, an increase of 1.83 percent, the most since the previous March’s 1.92 percent gain, Al Eqtisadiah reported, citing SAMA data.

On an annual basis, bank deposits in Saudi Arabia increased by 10.2 percent, or SR180.47 billion. Individual and corporate deposits, which made up 74.6 percent of total deposits, increased by 9.8 percent year over year.

Demand deposits increased 14.2 percent to SR1.29 trillion in the 12 months to the end of February, making up 88 percent of total deposits with savings and foreign deposits accounting for the rest.


Saudi banks in a ‘sweet spot’ says fund manager

Saudi banks in a ‘sweet spot’ says fund manager
Updated 1 min 20 sec ago

Saudi banks in a ‘sweet spot’ says fund manager

Saudi banks in a ‘sweet spot’ says fund manager
  • Shareek program to boost corporate borrowing
  • Saudi banks well positioned with low cost of funding and deposits

DUBAI: Saudi banks are in a “sweet spot” to tap rising corporate and mortgage lending according to a top regional fund manager.
It comes after a rampant rise in the stock price of the Kingdom’s big lenders.
“I think Saudi banks in general are in a sweet spot,” Hedi Ben Mlouka, CEO and founder of FIM partners, told Bloomberg TV on Thursday. “You are seeing growth no longer coming from a low base, we are talking big numbers here that move the balance sheet and the profitability of these banks. The ‘Shareek’ program is going to spur the first growth we have seen in corporate borrowing to support all this capex,” he said.
The $2.7 trillion Shareek program was announced by the Saudi government last month and aims to provide incentives for publicly quoted companies to channel dividend payments into long-term investment in the Kingdom.
“The Saudi banks are in the best position to take advantage of that because their cost of funding and cost of deposits is low,” said Mlouka. “The Islamic banks are the best positioned from that perspective because they have the lowest cost of funding.”
Saudi banks have been among the best performers among regional publicly traded stocks in the first quarter, with the shares of Tadawul-listed lenders up by an average of 26 percent since the start of the year, according to Bloomberg data.
Saudi Arabia’s debt capital market is expected to grow as the Kingdom doubles down on its Vision 2030 goals, S&P Global Ratings said this week.
The Kingdom is banking on the increasing role of its debt and equities market in financing Vision 2030, the report said, as it seeks to attract more foreign direct investments.
“We think banks will continue to play an important role in financing Vision 2030, but foresee an increased role for the local capital market,” said S&P Global Ratings credit analyst Timucin Engin in the report published Tuesday.


Sadara first quarter profit surges on chemical prices increase, debt rejig

Sadara first quarter profit surges on chemical prices increase, debt rejig
Updated 32 min 34 sec ago

Sadara first quarter profit surges on chemical prices increase, debt rejig

Sadara first quarter profit surges on chemical prices increase, debt rejig
  • Q1 comprehensive income was SR2.04 billion vs. a loss of SR2.24 billion
  • Sadara booked a gain of SR1.05 billion on debt restructuring

DUBAI: Sadara Chemical Company reported a surge in profit in the first quarter as the price of its products increased and it booked a sizeable gain from the restructuring of its debts.
First quarter total comprehensive income rose to SR2.04 billion ($544 million) compared with a loss of SR2.24 billion in the year-earlier period and a profit of SR109 million in the fourth quarter of 2020, Sadara said in a filing to the Tadawul.
Revenue increased 80 percent year on year and 31 percent from the previous quarter to SR4.42 billion. Profit per share was SR0.44, compared with a loss of SR0.37 a year earlier.
The improved performance was attributed to “higher selling prices, continuous financial discipline, and the recognition of a modification gain of SR1.05 billion from debt re-profiling,” the company said.
Sadara, a joint venture between Saudi Aramco and Dow Chemical, joins other Tadawul-listed Saudi petrochemical producers in reporting a rebound in first-quarter profit.
The sector reported net profits of SR8.5 billion in Q1 compared with collective losses of SR3.2 billion over the same period in 2020, according to data from financial information website Argaam.
Saudi petrochemicals giant SABIC, which accounts for 57 percent of total earnings in the sector, last month reported that its Q1 profits had more than doubled to SR4.86 billion compared to the previous quarter and rebounding from a loss of SR1.05 billion in Q1 2020.
Nine petrochemical companies, including SABIC, were back in the black after reporting losses last year.
Saudi Aramco said in late March it restructured its debt financing for Sadara Chemical Company. The Saudi national oil company also said an agreement had been reached to allocate more natural gas feedstock to the joint venture, which has been building the world’s biggest chemical complex ever delivered in a single phase, in Jubail.
Sahara International Petrochemical Company (Sipchem), which had reported profit after Zakat and tax of SR451 million, said today it had delivered SR136 million in synergies in 2020, or 78 percent of its target in half the timeframe.
Saudi International Petrochemical Company completed its $2 billion merger with Sahara in May 2019. It has a goal of SR175 million of synergies by May 20222, it said in an investor presentation.


UAE’s Etisalat to raise €1 billion with two-tranche bonds

UAE’s Etisalat to raise €1 billion with two-tranche bonds
Updated 06 May 2021

UAE’s Etisalat to raise €1 billion with two-tranche bonds

UAE’s Etisalat to raise €1 billion with two-tranche bonds

Abu Dhabi-based telecoms operator Etisalat is set to raise €1 billion ($1.2 billion) in dual-tranche bonds on Thursday, a document from one of the banks leading the deal showed.
The company plans to raise €500 million in seven-year notes and a further €500 million with a 12-year maturity, according to the document reviewed by Reuters.
The seven-year notes were being marketed at about 85 basis points over mid-swaps, with the 12-year tranche at about 110 bps over.
HSBC, BNP Paribas, First Abu Dhabi Bank and Societe Generale have been hired to arrange the transaction, which is expected to close later on Thursday.


Egypt PMI fell in April to lowest level in 9 months

Egypt PMI fell in April to lowest level in 9 months
Updated 06 May 2021

Egypt PMI fell in April to lowest level in 9 months

Egypt PMI fell in April to lowest level in 9 months
  • PMI fell to 47.7 in April from 48 in March, IHS Markit said
  • Output, new orders and employment all fell in April

RIYADH: Egypt’s non-oil private sector economic conditions worsened in April by the most since June 2020, according to IHS Markit.

The Egypt Purchasing Managers’ Index (PMI) fell to 47.7 in April from 48.0 in March, its fifth consecutive month below the 50 mark that separates expansion from contraction, IHS Market said.

Sub-indexes showed declines in output, new orders and employment as rising global raw material costs pushed inflation to the fastest pace since September 2019.

The level of new export orders received by Egyptian companies increased strongly during April, which purchasing managers attributed to an improvement in activity across foreign markets.

However, expectations for future output fell significantly in April, as a rise in domestic coronavirus cases and concerns about financial liquidity damped optimism, IHS Markit said.


Aramex profits hit by supply chain disruptions as new CEO unveiled

Aramex profits hit by supply chain disruptions as new CEO unveiled
Updated 06 May 2021

Aramex profits hit by supply chain disruptions as new CEO unveiled

Aramex profits hit by supply chain disruptions as new CEO unveiled
  • Q1 net profit fell 32 percent to 46 million dirhams
  • Revenue jumped 24 percent to 1.42 billion dirhams

DUBAI: Aramex failed to turn a surge in demand from e-commerce into profits as pandemic-related capacity constraints squeezed margins in the first quarter.
Q1 net profit fell 32 percent to 46 million dirhams ($12.5 million) even as revenues jumped 24 percent to 1.42 billion dirhams, the Dubai-based logistics company said in a filing to the Dubai Financial Market.
The increase in revenue was driven by a 35 percent gain in its International Express business to 647 million dirhams as cross-border e-commerce in the US, UK, Hong Kong and other Asian markets gathered pace. Its domestic express business grew 23 percent to 356 million dirhams, where e-commerce activity in Saudi Arabia was a major driver.
“The impact of COVID-19 continues to weigh on our operating margins because of relatively high line haul costs,” CEO Bashar Obeid said in the DFM filing. “The downward pressure on margins will likely continue for the remainder of the year, however, will slowly start to abate as we continue to explore ways and redesign our line haul network.”
Aramex also announced that Othman Aljeda will replace Obeid as CEO following an undisclosed transition period. Obeid resigned on April 29 after 28 years with the company and four years in the top job, citing personal reasons.