Wednesday 26, July 2017 by Nabilah Annuar

Saudi British Bank witnesses dip in profits for the second quarter

Decrease in net profit was driven by higher operating expenses due to increase in provision for credit losses.

In a statement on Tadawul, Saudi British Bank (SABB) reported a 5.58 per cent decline in net profit from SAR 2,293 million in the first half of 2016 to SAR 2,165 million in the first six months of this year.

The bank saw a 8.98 per cent increase quarter on quarter this year from SAR 1,036 million last quarter to SAR 1,129 million in Q2. However this was still a 1.91 per cent drop from SAR 1,151 million it recorded in the second quarter of 2016.

According to SABB, the decrease in net profit for this quarter (compared to the corresponding period last year) was primarily driven by higher operating expenses which increased by 10.4 per cent mainly due to increase in provision for credit losses. This increase in operating expenses has been partially offset by an increase in total operating income of 2.2 per cent due to a higher net special commission income, offset by a decrease in fee and commission income, exchange income and trading income.

Comparing the first six months of 2017 and that of 2017, the decrease in net profit was primarily driven by higher operating expenses which increased by 15.2 per cent mainly due to increase in provision for credit losses and impairment of other financial assets. This increase in operating expenses has been partially offset by an increase in total operating income of 1.9 per cent due to a higher net special commission income, offset by a decrease in fee and commission income, exchange income, gain on non-trading investments and trading income.

From Q1 of 2017, net income increased mainly due to a decrease in operating expenses of 13.9 per cent. This decrease was due to lower provision for credit losses and impairment of other financial assets. Total operating income decreased by 1.3 per cent mainly due to a reduction in fee and commission income and trading income offset by increase in net special commission income and dividend income.

Gross special commission income for the three months period ended 30 June 2017 was SAR 1,507 million as compared to SAR 1,515 million in corresponding period of last year, a decrease of 0.5 per cent.

Gross special commission income for the six months period ended 30 June 2017 was SAR 3,032 million as compared to SAR 2,885 million in corresponding period of last year, an increase of 5.1 per cent.

Total comprehensive income for the three months period ended 30 June 2017 was SAR 1,316 million as compared to SAR 1,158 million in corresponding period of last year, an increase of 13.6 per cent; and as compared to SAR 924 million in the previous quarter with an increase of 42.4 per cent.

Total comprehensive income for the six months period ended 30 June 2017 was SAR 2,240 million as compared to SAR 2,206 million in corresponding period of last year, an increase of 1.5 per cent.

Total shareholders' equity (book value) as at 30 June 2017 was SAR 32.7 billion compared to SAR 29.8 billion for same period of last year, an increase of 9.7 per cent.