Riyad Bank, Saudi Arabia’s third-largest lender by assets, posted a 27.2 per cent jump in its fourth-quarter net profit on Wednesday, beating forecasts as income rose and expenses declined.
The bank said in a bourse filing it made SAR1.03 billion ($274.6 million) in the three months ending Dec. 31, compared with SAR810 million in the same period of 2012.
Analysts surveyed by Reuters expected the bank to post an average net profit of SAR954.3 million for the fourth quarter.
Riyad Bank said the year-on-year improvement was due to an increase in operating income – which climbed 7.5 per cent to SAR1.795 billion – and a drop in expenses, without elaborating further.
Saudi companies issue brief earnings statements early in the reporting period before publishing more detailed results later.
Net profit for the full year was SAR3.95 billion, up 13.9 per cent from SAR3.47 billion in 2012. It cited the same factors of higher operating income – up 4.2 per cent in 2013 versus the previous year – and falling expenses for the rise in earnings.
Saudi banks have benefited from rising lending, deposits and deal activity in an economy buoyed by years of high state spending which is backed by strong oil prices and record government surpluses.
Many banks have been raising capital in recent months to strengthen their reserves after a period of sustained lending growth, with Riyad Bank completing a SAR4 billion capital-boosting Islamic bond issue in November.
Loans and advances at the end of 2013 stood at SAR131.2 billion, up 11.7 per cent on the same point of 2012.
Customer deposits gained 4.8 per cent from a year earlier and stood at SAR153.2 billion on December 31.
The bank said Jan. 7 its board had recommended a cash dividend of SAR0.8 for the second half of 2013. This was higher than the SAR0.65 it paid for the same period of 2012.