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Saudi’s Al Rajhi Bank Q4 Net Profit Falls 1.8%, Misses Forecast

Saudi’s Al Rajhi Bank Q4 Net Profit Falls 1.8%, Misses Forecast

The decrease was the sixth straight drop in quarterly profit posted by the bank.

Al Rajhi Bank, Saudi Arabia’s second-largest listed lender, posted a 1.8 per cent drop in its fourth-quarter net profit, it said on Thursday, missing analysts’ forecasts.

The bank made SAR1.52 billion riyals ($405 million) in the three months to Dec. 31 compared with SAR1.55 billion in the same period a year earlier, it said in a bourse statement.

Seven analysts surveyed by Reuters had expected the bank to post an average net profit of SAR1.7 billion for the quarter.

The decrease was the sixth straight drop in quarterly profit posted by the bank, which it attributed to lower total operating income.

Saudi lenders are facing strong headwinds as net interest income comes under pressure from weakening loan growth and fierce competition, especially in the retail market. Analysts also warn that a prolonged slump in oil prices could dent confidence in the banking sector.

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

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

Al Rajhi’s net profit for 2014 was SAR6.84 billion, an 8.1 per cent decrease on the previous year.

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