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Saudi’s Al Rajhi Bank Q1 net profit rises 21% on higher fees

Saudi’s Al Rajhi Bank Q1 net profit rises 21% on higher fees

The bank aims to boost its mortgage lending as more affordable housing comes on the market

Al Rajhi Bank, Saudi Arabia’s second-largest lender by assets, reported double-digit growth in first-quarter net profit on Tuesday, helped by higher special commission income and fees.

Saudi Arabia’s biggest Islamic lender said net profit rose 21 per cent in the three months ended March 31 to SAR2.89bn ($771m). It made net profit of SAR2.38bn in the same period a year earlier.

The bank aims to boost its mortgage lending as more affordable housing comes on the market, Chief Executive Steve Bertamini told Reuters this month.

Al Rajhi, which has traditionally focused on consumer banking, has been cautiously expanding its exposure to the private sector, Bertamini said, amid expectations that government employment may not rise much in the future.

Saudi banks’ performance in 2019 should be boosted by a surge in liquidity and an anticipated recovery in lending against a backdrop of higher oil prices.

Saudi Arabia’s economy grew in the fourth quarter of last year at its fastest rate since early 2016 due to an expansion in the oil sector, while non-oil growth was sluggish, statistics agency data showed in March.

Al Rajhi attributed its performance to an increase in total operating income, due to special commission income and fees.

Operating income for the quarter rose by 12 per cent year-on-year to SAR4.64bn, while profits from special commissions increased 15 per cent over the same time frame to SAR3.94bn.

Loans and advances at the end of March stood at SAR236.42bn, up 3.6 per cent year-on-year, while deposits rose 3.4 per cent to SAR293.5bn over the same period.

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