April 13 (Bloomberg) -- Al Rajhi Bank, the worst performer on Saudi benchmark’s bank index this year, plunged the most in 10 months as first-quarter profit trailed analysts’ estimates.
The stock dropped as much as 4 percent, the biggest fall since June, and was 2.7 percent lower at 11:36 a.m. in Riyadh. It was the second-biggest decliner on the Saudi Tadawul All Share Index, which retreated 0.6 percent.
Al Rajhi, Saudi Arabia’s biggest listed lender, said first-quarter profit fell to 1.71 billion riyals ($456 million) from 2.05 billion riyals a year earlier as expenses increased. That missed the average analysts’ estimates of 2.08 billion riyals, according to data compiled by Bloomberg.
Al Rajhi has reported three consecutive quarters of lower profit growth as demand for credit among businesses in the Arab world’s biggest economy eased. The pace of business lending dropped to 12 percent last year from 17 percent in 2012, according to central bank data.
The bank was cut to hold from buy last month by Riyad Capital, which said the “advantage Rajhi enjoyed over peers in asset yields and net interest margins is shrinking.” JPMorgan Chase & Co. dropped Al Rajhi as a correspondent banking client at the end of last year amid a push to improve risk controls, said two people with direct knowledge of the move.
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