Listed Saudi banks recorded net profits of 14.7 billion riyals ($3.9 billion) in the corresponding period of 2022.
The Saudi banking sector includes 10 local banks listed on the local stock exchange after the merger of SABB and Alawwal banks, as well as Samba and Al-Ahly, and branches of more than 15 foreign banks.
The Central Bank of Saudi Arabia has raised interest rates 10 times since March 2022, in line with the US Federal Reserve, given the peg of the Saudi riyal to the US dollar.
Interest rates are a major reason for the profitability of banks around the world, as interest on loans is the main source of income for the sector, and an increase in it means an increase in profits for the sector.
Profits at National Commercial Bank, Saudi Arabia’s largest bank by assets, capital and profit, rose 11.6% in the first quarter to 5 billion riyals ($1.34 billion) .
The National Bank achieved the highest share of profits in the sector, with 29%.
Al-Rajhi Bank recorded the second highest profit, accounting for 24% of the sector’s profitability. Its profits rose 0.3% to 4.15 billion riyals ($1.11 billion).
Riyadh Bank (12% of the sector’s share) recorded the third highest profit, amounting to 2.02 billion riyals (539 million dollars), with a growth rate of 30.1%.
Profits increased due to the increase in total operating income, partially offset by an increase in total operating expenses. The increase in total operating income is due to the increase in net special commission income, net trading income, net foreign exchange income and Other operating income.
As the fourth bank to contribute to the profitability of the sector, SABB Bank contributed 10%, recording profits of 1.77 billion riyals (471 million dollars), a growth rate of 75.8% .
According to the bank, net profit increased due to the increase in total operating profit, and this was partially offset by an increase in the provision for expected credit losses, total operating expenses and the provision. for zakat and income tax.
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