Saudi banks’ net profits surge 7.5% to $1.4bn: SAMA 

Saudi banks’ net profits surge 7.5% to $1.4bn: SAMA 
The SAMA report noted that loans given to the private sector in February rose over 11 percent year-on-year to SR2.32 trillion. (Supplied)
Short Url
Updated 29 March 2023

Saudi banks’ net profits surge 7.5% to $1.4bn: SAMA 

Saudi banks’ net profits surge 7.5% to $1.4bn: SAMA 

RIYADH: In the backdrop of a looming global banking crisis, Saudi lenders continue to maintain strong credit growth driven by corporate loans.  

This has helped banks operating in the Kingdom record an aggregate year-on-year net profit of 7.5 percent to SR5.18 billion ($1.38 billion) in February 2023, the latest official data showed.   

In February 2022, the aggregate profit of Saudi banks was SR4.82 billion, noted the Saudi Central Bank, also known as SAMA, in its monthly report issued on Tuesday. 

On a month-on-month basis, however, the aggregate profit of banks, was down 19 percent in February, against January’s SR6.41 billion. 

A research report prepared by Al Rajhi Capital, which has analyzed the SAMA monthly data, attributed this modest growth in profits to the ongoing pressure on the cost of funding. 

“Mortgage origination came in at SR7.1 billion, lower than January, but slightly better than our expectations,” stated Al Rajhi Capital, a company that is authorized to engage in securities activities in Saudi Arabia. 

Al Rajhi said its updated estimate for monthly mortgage origination for 2023 is SR6.8 billion, which is a bit lower than the previous estimate of SR7.0 billion.  

The SAMA report noted that loans given to the private sector in February rose over 11 percent year-on-year to SR2.32 trillion. 

Based on these figures, Al Rajhi analysts expect Saudi banks’ loan growth to be around 10 percent in 2023, which they said, is on the conservative side as “we see upside risks to it.”   

This comes as the combined deposits of Saudi banks rose by 8 percent year-on-year to SR2.30 trillion in February. 

Al Rajhi analysis noted that total deposits in the month of February grew 1.2 percent month-on-month, higher than credit growth of 0.9 percent, which the analysts said: “should ease some pressure on the funding side going forward.” 

The apex bank data showed that the aggregate assets of banks in the Kingdom rose by more than 11 percent year-on-year to SR3.66 trillion in February. 

Whereas, the total assets held by SAMA increased by SR830 million month-on-month to SR1.92 trillion in February 2023. 

This is when compared with February 2022 grew by SR130.4 billion. 

SAMA’s investments in foreign securities, which account for 55 percent of its total assets, declined by around 7 percent to SR1.04 trillion in February. 

The SAMA report further revealed that the foreign direct investment inflow in Saudi Arabia was SR29.6 billion in 2022, thus bringing the cumulative FDI balance in the Kingdom to SR1.8 trillion. 

The rise of FDI in Saudi Arabia clearly indicates the Kingdom’s growing popularity as a global investment hub, a goal outlined in Vision 2030. 

The report, however, added that the Kingdom’s FDI in 2022 witnessed a 60 percent fall compared to 2021. This massive figure of net FDI in 2021 was primarily attributed to a $12.4 billion infrastructure deal between Aramco and a global investor consortium, in which the consortium acquired a 49 percent stake in Aramco Oil Pipelines Co. 

Excluding this mammoth transaction, FDI inflows in 2022 increased by 14.5 percent compared to the year earlier, the SAMA report noted. 


Saudi Arabia’s Red Sea Global reviews strategic partnership opportunities in Egypt

Saudi Arabia’s Red Sea Global reviews strategic partnership opportunities in Egypt
Updated 30 May 2023

Saudi Arabia’s Red Sea Global reviews strategic partnership opportunities in Egypt

Saudi Arabia’s Red Sea Global reviews strategic partnership opportunities in Egypt

RIYADH: The Saudi-based Red Sea Global company held its second promotional procurement exhibition in Cairo, in cooperation with its media partner, MEED Network, and in the presence of representatives from more than 100 Egyptian companies from the private sector, the Saudi Press Agency reported on Monday.
The exhibition is the second of its kind in a series of local, regional and international introductory meetings conducted by the company, which is wholly owned by the Kingdom’s Public Investment Fund.
The event aims to establish more partnerships with the private sector to enable the delivery of the company’s growing portfolio of projects.
Ben Edwards, group head of cost, commercial and procurement at Red Sea Global, said the opportunity to present projects and opportunities available to the Egyptian market is a major strategic step for Red Sea International this year.
“To achieve the innovative approach that we seek, especially with regard to sustainability, we had to identify organizations and companies that share the same vision to establish real partnerships with them, and we met today with many future partners,” he added.
Red Sea Global is one of the companies with continuous progress in implementing projects for its “Red Sea” and “Amaala” destinations, and the twelve future projects in the company’s portfolio, SPA added.
In March, it held its first regional induction tour in Doha, where the company met with representatives from more than 100 Qatari companies.
The company has awarded contracts worth more than SR40 billion ($10.6 billion) for its “Red Sea” and “Amaala” destinations so far and this year, contracts worth SR5 billion were awarded, with an additional SR20 billion expected to be awarded before the end of the year.


Riyadh Airports CEO joins international aviation body

Riyadh Airports Co. CEO Musad Aldaood (File)
Riyadh Airports Co. CEO Musad Aldaood (File)
Updated 29 May 2023

Riyadh Airports CEO joins international aviation body

Riyadh Airports Co. CEO Musad Aldaood (File)

RIYADH: In significant global recognition of the Kingdom’s aviation sector, Riyadh Airports Co. CEO Musad Aldaood has been elected to the board of the Airports Council International, Asia-Pacific.   

This assembly of airport authorities is dedicated to improving airport operations and standards, representing their collective interests with international organizations like International Civil Aviation Organization and International Air Transport Association.  

The announcement was made during the 18th meeting of the ACI Asia-Pacific Assembly in Kobe, Japan. 

Aldaood joined leaders from airports across mainland Asia, Australasia, the Pacific Ocean islands and key North American points such as Vancouver, San Francisco and Hawaii.  

Commenting on his appointment, Aldaood said he was looking forward to working with other board members, the World Executive Committee, regional advisers, and the management team to continuously make airports a great and safe place for travelers and airport partners.   

“We will devote our expertise and efforts to improve the aviation sector, raise the aspirations and expectations, and work with relevant sectors in a joint and integrated manner to develop our work through the ACI World Governing Board, Asia-Pacific and the Middle East,” he said.  

Aldaood brings over 21 years of experience managing and operating King Khalid International Airport under the RAC.   

He also holds concurrent positions as the vice chair of the board of directors of Saudi Public Transport Co. and a board member of Altanfeethi Co., overseeing executive terminals and offices across the Kingdom’s airports.  


New shipping service added to Kingdom’s Dammam port

New shipping service added to Kingdom’s Dammam port
Updated 29 May 2023

New shipping service added to Kingdom’s Dammam port

New shipping service added to Kingdom’s Dammam port

RIYADH: Traffic at the King Abdulaziz Port in Dammam will soon ease thanks to the addition of Swiss-based Mediterranean Shipping Co.’s new service, the Saudi Press Agency reported.

The Upper Gulf Express shipping service aligns with the objectives of the National Transport and Logistics Strategy to position the Kingdom as a global logistics hub connecting three continents, the General Authority of Ports said. 

The shipping service connects Dammam with the ports of Abu Dhabi and Sharjah in the UAE as well as the Iraqi port of Umm Qasr.  

The service which is set to launch at the end of May also consolidates the position of the King Abdulaziz Port as the main port through which goods pass from all over the world. 

In January this year, the ports authority announced the launch of a new freight service at King Abdulaziz Port operated by MSC.    

The connection allows Dammam to enjoy weekly sailings to eight maritime destinations spanning the Arabian Gulf, South Asia, and Southern Africa.    

These include the ports of Khalifa bin Salman in Bahrain, Khalifa in the UAE, Qasim in Pakistan, Mundra and Hazira in India, Port Louis in Mauritius, and Durban and Coega in South Africa.    

The service started on Jan. 21 and features five vessels with an average carrying capacity exceeding 6,000 twenty-foot equivalent units.


UAE’s Dana Gas raises its foreign ownership limit to 100% 

UAE’s Dana Gas raises its foreign ownership limit to 100% 
Updated 29 May 2023

UAE’s Dana Gas raises its foreign ownership limit to 100% 

UAE’s Dana Gas raises its foreign ownership limit to 100% 

RIYADH: The UAE’s vision of strengthening its capital markets has become one step closer to reality as Sharjah-based energy company Dana Gas plans to raise its foreign ownership limit to 100 percent. 

Listed on the Abu Dhabi market, the firm announced that it had obtained the approval of the regulatory authorities to raise the percentage of foreign ownership from 49 percent to 100 percent of its capital, according to a regulatory filing on the Abu Dhabi Securities Exchange. 

The largest private sector natural gas company in the region disclosed that the move aligns well with the UAE’s new Commercial Companies Law that abolished a requirement that UAE nationals own 51 percent of onshore firms. 

“Opening our company fully to foreign ownership will support the UAE’s vision of strengthening its dynamic capital markets by attracting greater numbers of international investors and deepening market liquidity,” said Dana Gas Chairman Hamid Jafar in a press statement. 

According to Jafar, the company’s growth outlook remained rather sturdy in the Kurdistan region of Iraq, where the firm is seeking to increase production. 

It also maintained a strong growth outlook in Egypt, where the firm is working on maximizing the value of its assets by negotiating improved fiscal terms. 

However, Dana Gas’ recent earnings report was not favorable. The company generated a net profit of 183 million UAE dirhams ($50 million) in the first quarter of 2023 compared to 198 million UAE dirhams in the year-ago period. 

Profitability for the quarter dropped 7 percent compared to a 22 percent decline in the company’s realized prices. However, the impact of lower realized prices on the company’s profitability was partially offset by reduced operating costs by 14 percent. 

Revenue was 13 percent lower at 447 million UAE dirhams in the first quarter of 2023 compared to 513 million UAE dirhams in 2022.

The decrease in revenue, and subsequently net profit, was primarily due to a pullback in energy prices from high levels. 


Closing bell: Saudi stocks remain steady; TASI edges down 0.02%

Closing bell: Saudi stocks remain steady; TASI edges down 0.02%
Updated 29 May 2023

Closing bell: Saudi stocks remain steady; TASI edges down 0.02%

Closing bell: Saudi stocks remain steady; TASI edges down 0.02%

RIYADH: Saudi Arabia’s Tadawul All Share Index lost 2.38 points or 0.02 percent to close at 11,135.67 on Monday.

While the parallel market Nomu shed 45 points to close at 21,007.84, the MSCI Tadawul Index edged down by 0.58 percent at 1,483.55.

The total trading turnover of the benchmark index was SR4.76 billion ($1.27 billion) as 111 listed stocks advanced, while 95 retreated.

Yanbu Cement Co. emerged as the best performer as its share price surged by 8.05 percent to SR40.95.AYYAN Investment Co. and Saudi Pharmaceutical Industries and Medical Appliances Corp. were other top gainers, as their share prices advanced by 6.71 percent and 5.45 percent respectively.

Astra Industrial Group was the worst performer, as its share price dropped by 3.22 percent to SR72.20.

Leejam Sports Co.’s share price was down by 3.20 percent to SR114.80, while stocks of Naseej International Trading Co. dipped by 3.03 percent to close at SR48.

Mayar Holding Co. was the top gainer on the Kingdom’s parallel market. The company’s share price soared by 15.82 percent to close at SR79.80.

Future Care Trading Co. was the worst performer on Nomu, as its share price went down by 8.83 percent.