Bank Aljazira reports profit surge of 3% to SR258 mln in 2Q

Bank Aljazira announced that its profits after zakat and tax rose 2.6% to SR 257.8 million in the second quarter of 2022 compared to SR 251.2 million during the same period of 2021.

This came after Bank Aljazira announcement on Monday of the preliminary financial results for the period ending on 30.06.2022 (six months).

The company’s operational profits rose 2.6% to SR 806.9 million in the 2^nd quarter of the current year from SR 828.4 million in the same period of the previous year.

Net Profits of Bank Aljazira surged 10.4% to SR 632.7 million in the first half of this year from SR 572.8 million a year ago, while the profit per share soared to SR 0.72 from SR 0.7.

Net income has increased by 3% mainly due to a decrease in total operating expenses by 14%. The reduction in total operating expenses is mainly due to a decrease in net impairment charge for financing and other financial assets against an increase in other general and administrative expenses, depreciation and amortization expenses, salaries and employee-related expenses and rent and premises-related expenses. This was partially offset by absence of a one-time gain on deemed disposal of an associated company and a decrease in operating income by 3%, mainly due to a decrease in net financing and investment income, net fees from banking services and net gains on derecognition of financial assets at FVOCI against an increase in net gains on FVIS financial instruments and net exchange income.

Net income has decreased by 31% mainly due to a decrease in operating income by 18%. The decrease in operating income is mainly due to a decrease in net financing and investment income, other operating income, net gains on derecognition of financial assets at amortised cost, net fees from banking services and net gains on derecognition of financial assets at FVOCI against an increase in net gains on FVIS financial instruments and net exchange income. On the other hand, total operating expenses have decreased by 10% mainly due to a decrease in net impairment charge for financing and other financial assets, salaries and employee-related expenses, other general and administrative expenses and depreciation and amortization expenses against an increase in other operating expenses.

Net income has increased by 10% mainly due to a decrease in total operating expenses by 8%. The reduction in total operating expenses is mainly due to a decrease in net impairment charge for financing and other financial assets and other operating expenses against an increase in other general and administrative expenses and salaries and employee-related expenses. Also, there is an increase in operating income by 1%, mainly due to an increase in other operating income, net financing and investment income, net gains on FVIS financial instruments, net exchange income and dividend income against a decrease in net gains on derecognition of financial assets at amortised cost and net fees from banking services. On the other hand, this was partially offset by absence of a one-time gain on deemed disposal of an associated company and higher zakat charge.

Additional Information:

1- Net Impairment charge for financing and other financial assets for current quarter is SR 39.6 million as compared to SR 157.9 million in similar quarter of previous year, a decrease of 75%. And as compared to SR 94.0 million in the previous quarter with a decrease of 58%.

2- Net Impairment charge for financing and other financial assets for current period is SR 133.6 million as compared to SR 310.8 million in same period of previous year with a decrease of 57%.

3- Earnings per share for the current and prior period have been calculated by dividing net income for the period after Zakat and income tax (adjusted for Tier 1 Sukuk costs) by the weighted average number of shares outstanding i.e. 820 million shares.

4- During Q2 2021, the Bank issued Tier 1 Sukuk amounting to SAR 1.875 billion (denominated in US Dollars) which is included as a part of total Equity.