Al Rajhi Bank Third-Quarter Profit Drops 3.2%, Misses EstimatesDeema Almashabi
Al Rajhi Bank reported its fifth consecutive quarter of declining profit as Saudi Arabia’s largest lender by market value battles for market share.
Third-quarter net income dropped to 1.66 billion riyals ($443 million) from 1.72 billion riyals a year earlier, the Riyadh-based bank said in a statement. The mean estimate of eight analysts was for profit of 1.94 billion riyals, according to data compiled by Bloomberg. The bank attributed the profit decline to an increase in expenses, without giving further details.
Banks in Saudi Arabia are still nursing non-performing loans from the global credit crisis, when the ratio of bad debt doubled in a year to about 4 percent in 2009, Moody’s Investors Service said in a report in March. Al Rajhi risks losing market share to Saudi peers as profit slumps at the world’s biggest publicly traded Islamic lender, EFG-Hermes Holding SAE said in July.
Al Rajhi also faces the prospect of investors moving away from its shares as National Commercial Bank, the largest lender in the kingdom, starts its initial public offering next week. National Commercial Bank plans to raise 22.5 billion riyals selling shares at 45 riyals apiece.
Al Rajhi shares fell 2 percent to 66.11 riyals at the close in Riyadh today. The stock has retreated 1.9 percent this year compared with a 16 percent gain for the benchmark Tadawul All Share Index.