Banque Saudi Fransi Q1 profits surge to SAR 1.15 billion, marking 7% growth

Banque Saudi Fransi reported a notable growth in net profit after zakat and tax, reaching SAR 1.15 billion in the first quarter, marking a 7% increase from SAR 1.07 billion recorded in the corresponding quarter of the previous year. These figures were unveiled on Thursday with the release of the preliminary financial results for the period ending March 31, 2024 (3 months).
The bank’s total operations profit for the first quarter stood at SAR 2.33 billion, slightly surpassing the SAR 2.32 billion reported in the same quarter of the prior year, reflecting a marginal increase of 0.6%.
Earnings per share for the current period reached SAR 0.91, compared to SAR 0.85 in the corresponding period last year, indicating positive growth and performance for Banque Saudi Fransi.
The gross special commission income surged by 27.5%, primarily attributed to enhanced returns from financing and investments. However, there was a marginal decrease of 0.3% in net special commission income, largely due to an uptick in special commission expense.
The rise in net income can be chiefly attributed to a 6.2% reduction in total operating expenses, coupled with a modest 0.6% increase in total operating income. This decline in total operating expenses was primarily spurred by a decrease in the impairment charge for expected credit losses on loans and advances, although it was partly offset by an impairment charge for other financial assets and an increase in salaries and employee-related expenses.
The uptick in total operating income was fueled by higher trading income and net fee and commission income. However, this increase was somewhat mitigated by a reduction in exchange income and net special commission income.
Net impairment charges for financing and other financial assets saw a significant decrease of 32.0%, primarily resulting from a notable 42.6% reduction in impairment charges on loans and advances. However, this decline was partly offset by a lower impairment charge reversal for investments, financial assets, and other items.
The gross special commission income experienced a notable uptick of 9.0%, predominantly fueled by volume growth in financing and investments, while net special commission income saw a moderate increase of 2.7%.
The increase in net income can be attributed mainly to a 6.4% rise in total operating income, coupled with a substantial 16.7% decrease in total operating expenses. This boost in total operating income was driven by higher trading income, net special commission income, and net fee and commission income, although it was partially counterbalanced by a reduction in exchange income.
The decrease in total operating expenses was primarily attributed to lower impairment charges for expected credit losses on loans and advances, as well as reductions in other operating and general administrative expenses, and depreciation and amortization. However, there was an increase in salaries and employee-related expenses.
Net impairment charges for financing and other financial assets decreased by 33.2%, mainly due to a 31.4% decrease in the impairment charge on loans and advances, coupled with a marginal provision reversal in impairment charges for investments, financial assets, and other items.
Banque Saudi Fransi’s administration clarified that certain prior period figures have been reclassified to align with the current period presentation.
Net income from Special Commission of Investment is calculated by deducting special commission expenses from debt securities and term loans.
Earnings per share (EPS) for the current and previous periods are computed by dividing the net income after zakat for the period (adjusted for Tier 1 Sukuk costs) by the weighted average number of shares outstanding, excluding treasury shares.
The Tier 1 Sukuk amounting to SAR 5 billion is included as part of Total Equity.