JEDDAH, 16 January 2007 — Abdullah Salim Bahamdan, chairman of the National Commercial Bank (NCB) board of directors, announced yesterday that the bank had achieved a net income of SR6.273 billion for 2006, an increase of SR1.262 billion (25.2 percent) over 2005, and its total operating income grew to SR9.292 billion during 2006 compared to SR7.491 billion in 2005, an increase of 24 percent. Total assets grew by 6.8 percent to SR155.706 billion on Dec. 31, 2006 compared to the year end of 2005 and net loans and advances increased to SR77.245 billion. Customer deposits reached SR117.499 billion, an increase of 12 percent. In addition, NCB’s total shareholders’ equity increased to SR23.999 billion and the ratio of equity to assets stood at a robust 15.4 percent driven by continuous improvement in profitability.
The bank continued to maintain its high profitability ratios as return on average assets (ROA) increased to 4.2 percent and the return on average equity (ROE) was 27.5 percent, while earnings per share (EPS) improved from SR5.57 in 2005 (adjusted retrospectively for the issuance of bonus shares and shares split) to SR6.97 in 2006.
The chairman also announced that the board of directors had decided to recommend to the extraordinary General Assembly to increase the paid-in capital from SR9 billion to SR15 billion by capitalizing SR6 billion from general reserve through the issuance of two bonus shares for every three shares. This will increase the total number of outstanding shares from 900 million to 1.5 billion shares of SR10 nominal value per share. These recommendations are subject to the statutory approvals from concerned parties and the final approval of the shareholders at their extraordinary general assembly meeting to be held during the first quarter of 2007. Bahamdan added that the increase in capital had been driven to support and strengthen the bank capital base to enable it to fulfill its strategy of growth in the current activities and to expand into new ones.
Meanwhile, the NCB attained approval from the Capital Market Authority (CMA) to establish financial market company. The company is the first of its kind owned by a national bank to be established in the Kingdom to manage assets and investment.
The new company’s business includes a complete series of financial activities accredited by the CMA, such as dealing as originator and agent and pledge to manage, organize and provide consultation and secure financial credit. After having been issued the license from the CMA, the NCB will be the first national bank to attain a license of this kind.
Bahamdan said: “It makes us proud to be the first national bank to receive the license from the Capital Market Authority. It affirms our commitment to support the growth of the Saudi economy and our determination to continue providing the best services to our clients.”
Bahamdan expressed his thanks to the efforts of the director and board of the CMA. He also thanked the governor of the Saudi Arabian Monetary Agency (SAMA) for its support toward this pioneering project.
Abdulkareem Abu AlNasr, CEO, the NCB, stated that attaining such a license was a primary step toward achieving the bank’s goals in maintaining its leading position locally and on the regional scale. “Establishing the AlAhli Financial Company will strengthen its place, especially after allowing many large international banks to work in the Kingdom after the Kingdom joined the World Trade Organization in 2005,” he added.
Abu AlNasr asserted that this step was in keeping with the bank’s strategic direction toward increasing its operation and expanding its presence on the national and Arab front, especially after the bank announced that it was raising its capital to SR15 billion by increasing its resources to support expansion plans and confront the growth demands in light of the economic surge witnessed by the Kingdom and other Gulf countries.
