Saudi's National Commercial Bank Q1 net profit up 2.7 pct

18/04/2017 12:14 AST

Saudi Arabia'sNational Commercial Bank <1180.SE> (NCB), the kingdom's largest lender, reported a 2.7 percent rise in first-quarter net profit on Tuesday as trading and investments income edged up, offsetting a rise in expenses. It is the sixth major Saudi bank to report earnings this quarter, with results mixed because of a rise in bad debt for some and higher operating income for others.

NCB's net profit rose to 2.70 billion riyals ($720 million) in the three months to March 31, from 2.63 billion riyals in the same period of 2016, it said in a bourse statement. SICO Bahrain had forecast NCB would make a quarterly profit of 2.39 billion riyals.

NCB's total operating income climbed by 2.9 percent during the quarter as a result of higher trading income, income from investments and gains on non-trading investment. Operating expenses rose by 3.2 percent mainly due to an increase in impairment charges for credit losses and an increase in depreciation of property and equipment.

Banks in the kingdom are contending with sluggish activity as depressed oil prices prompt reduced spending by the government, companies and consumers. Deposits at the bank, which has perhaps the closest links to the government, dipped 3.8 percent year on year to 313.65 billion riyals at the end of March, continuing the decline in levels seen in 2016.

Saudi banking deposits have come under strain as the government has drawn down cash parked with banks to help plug its budget deficit. Loans and advances at the end of March stood at 254.20 billion riyals, down 4.2 percent on a year earlier.

Quarterly operating income rose by 2.9 percent on the corresponding period of 2016 to 4.86 billion riyals, while profits from special commissions decreased 2.2 percent over the same timeframe to 3.36 billion riyals.

Reuters