Riyad Bank, Saudi Arabia’s third-largest lender by market value, anticipates that 2012 profit will increase as much as last year, boosted by government spending, Senior Vice President Hisham al-Abdali said.
“Net income this year may grow around the same figure of last year and lending may accelerate 10 to 13 percent,” al-Abdali said in an interview in Riyadh today. “This year will be good, even better, thanks to the record budget.”
Saudi Arabian banks are benefiting from a pick-up in lending as the Arab world’s biggest economy invests in infrastructure and industrial projects. Lending to private enterprises climbed 11 percent to 858.4 billion riyals ($229 billion) at the end of last year from 775.8 billion riyals in December 2010, according to central bank data.
The government forecast a budget surplus of 12 billion riyals this year after King Abdullah announced a $130 billion spending plan in 2011 to build homes and reduce unemployment.
Riyad Bank’s net income rose 11 percent last year to 3.15 billion riyals from 2010, according to data on Bloomberg.
The Riyadh-based bank’s outstanding loans to small-and-medium businesses may climb 30 percent to 50 percent this year, from 1.5 billion riyals at the end of December, said al-Abdali, who is also the bank’s commercial banking manager. The lender’s market share in SME lending rose to 30 percent last year from 25 percent a year earlier, he said.
Riyad Bank’s shares closed 0.4 percent higher at 24 riyals in Riyadh today. The stock gained 3 percent this year.