JEDDAH, 28 January — Saudi Hollandi Bank (SHB) and Al Bank Al Saudi Al Fransi (BSF) yesterday reported substantial increase in net profits for the year 2001 over the previous year, while Al-Rajhi Banking and Investment Corp. said its nets earnings for the year dropped 16.7 percent.
Saudi Hollandi reported a net profit of SR493.3 million for the year 2001, a 23 percent increase over the previous year. Customer deposits, demand for loans and excellent fee commissions were the primary factors behind the improvement during this period, according to a statement. Another contributing element, the bank stated, was its treasury operations, notwithstanding the latest decline in international interest rates.
Customer deposits increased from SR15.6 billion to SR17.5 billion (up 12 percent); customer loans from SR10.02 billion to SR11.5 billion (up 15 percent); total operating income from SR867.6 million to SR989.6 million (14 percent); and net income from SR401.1 million to SR493.5 million (up 23 percent).
The bank’s board of directors has decided to recommend payment of SR252 million, or SR20 net per share, as dividends to shareholders. This is in addition to distributing a half-yearly dividend for the year 2002. The board will also recommend increasing the bank’s capital from SR630 million to SR945 million through capitalizing part of the bank general reserves. One bonus share with par value of SR50 will be issued to shareholders for each two share subject to the approval of related governmental agencies.
SHB Managing Director Henk Mulder said the bank’s performance during 2001 met the management’s expectations and has put it on track for excellent increases in the net profit for the coming years.
Despite the general slowdown in the global economy and the current prevailing uncertainty, Mulder expressed optimism toward the Kingdom’s economy, particularly the banking sector. This is reflected by increased liquidity and improvement in the direct and indirect foreign investment flows into the Saudi market, he said.
SHB, a leading Saudi bank quoted on the Saudi Stock Exchange with 39 branches and 115 ATMs in the Kingdom, claims to have successfully achieved a general reorganization of its operations. The bank — with 1,116 employees and a Saudization ratio that exceeds 70 percent — has embarked on a new initiative to send some of its staff to a reputable Dutch university to hone their skills.
BSF announced a net income of SR844.4 million ($225 million) achieved in 2001, an increase of 29 percent over its 2000 results.
The bank’s financial statement showed an across-the-board growth in major indicators: a 24 percent increase in investment portfolio that reached SR17.9 billion ($4.77 billion), and a loan portfolio of SR16.8 billion ($4.47 billion). Total assets exceeded SR40 billion ($10.6 billion), an increase of 14 percent above 2000 levels.
The diversification in banking products and services targeting a spectrum of clients and the successful control of expenses were the major contributors to the net results, BSF Chairman Ibrahim Al-Touq said.
Meanwhile, Al-Rajhi said it made SR1.54 billion ($410 million) in net profits in 2001, down from SR1.85 billion a year earlier. The Riyadh-based bank said in a statement it would pay a total of SR1.26 billion in dividends, or SR28 per share, to shareholders for 2001, unchanged from the previous year.
Al-Rajhi gave no reason for the drop in 2001 net profit, but a company official last month said the firm had made sufficient provisions to cover a $101 million exposure to bankrupt energy trader Enron Corp.
Al-Rajhi General Manager Abdullah Al-Suleiman Al-Rajhi said in the statement that the company had managed to expand its activities despite difficult global economic conditions. He said the bank had set up 31 new branches in 2001, bringing the total to 372.
Al-Rajhi operates according to Islamic principles.
