RIYADH: Saudi National Bank saw its net profits increase by 1.4 percent in the second quarter from a year ago, missing analyst estimates in its first quarterly earnings report since its formation through the merger of National Commercial Bank and Samba Financial Group in April.
Saudi Arabia’s biggest retail lender, also known as Al Ahli, posted a second-quarter net profit after zakat and income tax of SR2.12 billion ($565 million), the company said in a filing to the Tadawul stock market, compared with the Bloomberg analyst consensus of SR4.1 billion. Alrajhi Bank’s second-quarter net profit was 3.61 billion riyals, with an increase of 47 percent from a year ago.
“The merger took place in April, which is only 3 months ago, so although the result is somewhat supportive, one has to realize that the full energy and cost savings and the synergy between the banks following the merger take time to be realized, given the different management cultures of the two organizations,” Mohammed Ramady, an independent Saudi economist, told Arab News.
In the six months to the end of June, Al Ahli posted a 12.3 percent increase in net profit after zakat and income tax to SR5.53 billion. Al Ahli assets climbed to SR896 billion at the end of June from SR557 billion a year earlier, while the total shareholders’ equity without minority rights jumped by 120 percent to SR159 billion riyals.
The bank’s financing and advances portfolio rose to SR503 billion from SR316 billion, while customer deposits were SR588 billion compared with SR380 billion a year earlier.
“Our first financial results after the completion of the merger process reflect the strength of the financial entity that we aspired to establish,” said Al-Ahli Chairman Ammar bin Abdul Wahed Al-Khudairi.
The Saudi National Bank (SNB) second quarter results include the results of the National Commercial Bank for a period of six months and Samba Financial Group for a period of only three months from the date of the official completion of the merger process on April 1, 2021, and the provisions for credit losses related to the merger, according to the statement.