Business | Banking

Saudi bank profits rise despite soaring provisions for bad loans

But HSBC's Saudi affiliate suffers 19.8% fall in quarterly profit

  • Reuters
  • Published: 00:00 October 25, 2009
  • Gulf News

Riyadh: SABB bank, HSBC's Saudi affiliate, booked 351.5 million riyals (Dh343.92 million) in provisions for loan losses during the third quarter, bourse data showed on Saturday.

SABB reported a worse-than-expected 19.8 per cent drop in third quarter net profit, hit by an increase in provisions for bad loans.

The data also showed that Aljazira Bank made provisions for loan losses of 115.7 million riyals during the third quarter, the lender's highest in at least one year, while Saudi Investment Bank (SAIB) booked 60 million riyals for the same purpose, its the highest this year.

Aljazira reported a 14 per cent increase in third-quarter net profit while SAIB tripled its net profit during the same period.

The provisions have been widely expected amid concerns over the solvency levels of heavily indebted Saudi conglomerates Saad Group and Ahmad Hamad Algosaibi & Bros.

Unlike their peers in the Gulf Arab region, Saudi banks have not disclosed the level of their exposure to these two firms and this keeps analysts wondering whether any newly booked sums would be high enough to fully cushion them against anticipated losses.

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