Saudi Shares Drop Most in 4 Months as Banks Miss Profit Estimate

Saudi Arabia’s benchmark stock index slid the most in more than four months as local lenders missed third-quarter earnings estimates.

The Tadawul All Share Index lost 1.7 percent to 6,682.47 by the 3:30 p.m. close in Riyadh, the sharpest retreat since June 2. Saudi British Bank sank 2.7 percent to a Dec. 21 low of 29.1 riyals. Banque Saudi Fransi, partly owned by Paris-based Credit Agricole SA, retreated 3.3 percent to 29.7 riyals, the biggest drop since Sept. 18 last year.

Saudi British Bank reported a 4 percent gain in third-quarter profit to 656 million riyals ($175 million) on Oct. 10, missing a 826 million riyal forecast. Banque Saudi Fransi posted a 662 million riyal profit the same day, short of the mean estimate of six analysts for 785 million riyals. The Tadawul All Share Bank Index has gained 1 percent this year compared with a 4.1 percent rise in the All Share Index.

“We expected bank earnings to weigh on the session today,” Asim Bukhtiar, head of research at Riyad Capital, said in an e-mail. “A sudden spike in provisions led to earnings misses for Saudi British Bank and Banque Saudi Fransi. There could be more negative surprises later in the week.”

Samba Financial Group, the second-largest lender by market value, retreated the most since July 23, dropping 2.3 percent to 43.4 riyals. Samba hasn’t reported quarterly results yet.

Saudi Arabia’s stock exchange is the only Persian Gulf bourse operating on Saturdays.

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