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Al Rajhi Bank Posts Fifth Straight Quarterly Profit Drop

Al Rajhi Bank Posts Fifth Straight Quarterly Profit Drop

The bank said it made SAR1.66 billion ($442.6 million) in the three months ending September 30, compared with SAR1.71 billion in the same period a year earlier.

Al Rajhi Bank, Saudi Arabia’s largest listed lender, posted a 3.2 per cent drop in its third-quarter net profit, it said in a bourse statement on Wednesday, missing analyst forecasts.

The bank said it made SAR1.66 billion ($442.6 million) in the three months ending September 30, compared with SAR1.71 billion in the same period a year earlier.

Ten analysts surveyed by Reuters expected the bank to post an average net profit of SAR1.9 billion for the quarter.

The decrease was the fifth straight drop in quarterly profit posted by the bank, which it attributed to an increase in total operating expenses, without elaborating.

Saudi companies issue brief earnings statements early in the reporting period before publishing more detailed results later.

The bank’s performance has been hit in recent quarters by higher provisioning and higher operating expenses.

Saudi lenders have felt ripples since the government’s crackdown in late 2013 on illegal foreign workers in the contracting industry. Many banks had ramped up lending to such companies, which have suffered as a result of lending shortages, delayed contracts and higher expenses caused by new laws aimed at employing more Saudis – who usually command higher salaries than expatriates.

Operating income for the quarter rose by 0.9 per cent on the corresponding period of 2013 to SAR3.4 billion, while profits from special commissions decreased 1.1 per cent over the same timeframe to SAR2.4 billion.

Loans and advances at the end of September stood at SAR203.6 billion, gaining 9.8 pe rcent on the same point of 2013, while deposits rose 10.9 percent to SAR250 billion over the same period.

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