10-Bank Earnings from Business Sector Surge 735% -Maaal, exclusively, reveals

As many as 10-bank listed on the stock exchange increased their earnings from the corporate sector to SR12.18 billion, before zakat and income tax, compared to SR1.46 billion, in the same period last year.

That was an amazing shooting up of 734.9%.

Although the Saudi National Bank (SNB) rose by 46% followed by Al-Rajhi Bank at 17%, receiving the majority of the returns, however, they were not the main cause of the increase.

According to “Maaal” exclusive, the Saudi British “SABB” was the leading drive force behind the outcome.

Losses of as much as SR7.42 billion were due to charges against the bank’s corporate sector results, in the first nine months of 2020, due to a decrease in the value of goodwill.

During the first nine months of 2021, nine out of the ten banks posted profits, but Bank Al-Jazira lost SR240 million, compared to SR122 million in the previous nine months, a 96.6% rise in losses.

In the first nine months of 2021, the income of the 10 banks from corporate sector activities, climbed by 14.8% to SR25.18 billion, compared to SR21.95 billion in the same period the previous year, a difference of SR3.24 billion.

SNB made 38% of the total operating income of banks from the corporate sector, as the bank’s total operating income from the corporate sector increased to SR9.67 billion, up from SR6.29 billion, a difference of SR3.38 billion, in figures, or a 53.7% increase.

Nonetheless, Al-Rajhi Bank’s activities’ earnings  climbed by 43% to SR2.61 billion, up from SR1.8 billion, a 43.2% gain, offsetting a drop of five banks, in this respect.

At the same time, the 10 banks’ allocations fell to SR7.6 billion, in the first nine months of 2021, down from SR8.35 billion, in the previous nine months, a fall of 8.6%.

The “Saudi British” lost SR716 million falling from SR1.2 billion to SR494 million, while Riyad Bank lost SR653 million, slipping from SR1.4 billion to SR752 million.

Provisions at four banks, the biggest of which was the Saudi National Bank, climbed by SR1.73 billion from SR1.01 billion to SR2.74 billion, while provisions at Alinma, Arab National Bank, and Al Jazira Bank grew by SR78 and SR71 million, respectively.

Banks returns from the corporate sector increased by 45.2% in Q3-2021, following an increase in net profits before zakat and income tax, at SR4.99 billion, up from SR3.44 billion, and the operating income increased by 20.4% to SR9.11 billion, up from SR7.56 billion, while bank allocations to the corporate sector decreased by 14.9% to SR2.0 billion.

SNB and Al-Rajhi Bank were the most profitable banks, in Q3, accounting for 48% and 16% of corporate earnings, respectively.

SNB led the way in terms of contribution to the rise in banks’ income from the corporate sector, as they soared up by SR894 million to SR2.41 billion, up from SR1.51 billion in Q3-2020, a 59% increase, followed by Saudi Fransi, achieving a 59% increase.

Profits climbed by SR372 million to reach SR804 million, compared to SR432 million in Q3-2020, while the net income of SABB, Investment, Alinma, and Bank Al-Jazira earnings from the sector decreased.

In terms of operating income in Q3, SNB was the first in terms of operating income, contributing to the increase, as the bank’s earnings from the corporate sector reached SR3.64 billion, up from SR2.27 billion, a 60.6% increase or a difference of SR1.37 billion, controlling 40% of the total banks’ operations’ earnings from the corporate sector, followed by Al-Rajhi, acquiring SR12 billion.

Six banks had an increase in operational revenues, while four others saw a decrease.

On the provisioning front, Riyad Bank’s corporate sector decreased by 75.5% to SR146 million, in Q3-2021, compared to SR595 million, in Q3-20 20, a difference of SR449 million, followed by Saudi Fransi’s provisions decrease by SR313 million to SR266 million, in Q3-2021, compared to SR579 million, in the same period, last year.

Source: Tadawul, Maaal follow up unit