Al Rajhi Bank, the biggest lender in Saudi Arabia by market capitalisation, reported a 7 per cent drop in its first-quarter net profit as provisions for bad loans rose and operating expenses climbed amid the coronavirus outbreak.
Net profit for the three months ending March 31 declined to 2.38 billion riyals (Dh2.25bn), the lender said in a statement to the Tadawul stock exchange, where its shares trade.
Total operating expenses at the end of the first three months of the year climbed 29 per cent "due to an increase in salaries and employees’ related benefits, depreciation, and other general and administrative expenses”, the bank said.
Impairment charge for financing during the reporting period rose 78 per cent to 693 million riyals, it added.
Lenders worldwide are facing a decline in profitability as loan growth slows and interest rates plunge as the pandemic disrupts the global economy, which is set to slide into the deepest recession since the Great Depression of the 1930s. The International Monetary Fund last month projected a 3 per cent contraction in global output for 2020 and said the outlook for the world economy is worse than the 2008 global economic crisis.
Al Rajhi last month said it is difficult for the bank to determine the size and extent of the financial impact on its operations in the wake of the government measures to suppress the coronavirus outbreak in the kingdom.
"Al Rajhi Bank assures that its financial soundness indicators are strong and able to stand the current economic challenges," it said in a April 28 statement.Saudi Arabia has now eased the nation-wide curfew, but it will enforce it again over the five-day Eid holidays, according to a government announcement earlier this week.
Despite the headwinds, Al Rajhi reported a 7 per cent surge in total operating income to 4.96bn riyals. It attributed the rise “an increase in net special commission income, fees from banking services, and exchange income”.
Net income from special commissions rose 4.2 per cent to 4.1bn riyals during the period, it added.
Assets at the end of the reporting period climbed 8 per cent year-on-year to 392bn riyals and investments rose 9 per cent to 49.6bn riyals. Customer deposits during the period climbed 7.5 per cent to 315.6bn riyals.
Banks in the Gulf are expected to navigate the current downturn without major issues due to their strong earnings capacity, according to a recent report by S&P Global Ratings.
The buffers developed during healthier times by the GCC banks mean they could take a hit worth a combined $36bn (Dh132bn) from the slump caused by Covid-19 and falling oil prices before they sustain losses.
“S&P Global Ratings believes that rated banks' profitability and provision cushions built over past years will help them navigate the current rough waters," the ratings agency said.
Saudi Arabia earlier this week reduced various expenditures, suspended the cost of living allowance and tripled VAT to offset the impact of the coronavirus pandemic on its economy and shore up its finances.
It also undertook various measures to relieve some of the strain on companies whose businesses have been hit by the coronavirus. Saudi Arabia has already announced measures worth 120bn riyals to boost the economy, including 50bn riyals dedicated to support small and medium-sized enterprises.
Mohammed bin Zayed Majlis
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UAE squad
Rohan Mustafa (captain), Ashfaq Ahmed, Ghulam Shabber, Rameez Shahzad, Mohammed Boota, Mohammed Usman, Adnan Mufti, Shaiman Anwar, Ahmed Raza, Imran Haider, Qadeer Ahmed, Mohammed Naveed, Amir Hayat, Zahoor Khan
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COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
The five pillars of Islam
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Global state-owned investor ranking by size
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The years Ramadan fell in May
The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
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Zayed Sustainability Prize
How being social media savvy can improve your well being
Next time when procastinating online remember that you can save thousands on paying for a personal trainer and a gym membership simply by watching YouTube videos and keeping up with the latest health tips and trends.
As social media apps are becoming more and more consumed by health experts and nutritionists who are using it to awareness and encourage patients to engage in physical activity.
Elizabeth Watson, a personal trainer from Stay Fit gym in Abu Dhabi suggests that “individuals can use social media as a means of keeping fit, there are a lot of great exercises you can do and train from experts at home just by watching videos on YouTube”.
Norlyn Torrena, a clinical nutritionist from Burjeel Hospital advises her clients to be more technologically active “most of my clients are so engaged with their phones that I advise them to download applications that offer health related services”.
Torrena said that “most people believe that dieting and keeping fit is boring”.
However, by using social media apps keeping fit means that people are “modern and are kept up to date with the latest heath tips and trends”.
“It can be a guide to a healthy lifestyle and exercise if used in the correct way, so I really encourage my clients to download health applications” said Mrs Torrena.
People can also connect with each other and exchange “tips and notes, it’s extremely healthy and fun”.
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In numbers
1,000 tonnes of waste collected daily:
- 800 tonnes converted into alternative fuel
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800 tonnes of RDF replaces 500 tonnes of coal
Two conveyor lines treat more than 350,000 tonnes of waste per year
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The specs
- Engine: 3.9-litre twin-turbo V8
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Violence%20
%3Cp%3EInstances%20of%20violence%20against%20Syrian%20refugees%20are%20not%20uncommon.%3C%2Fp%3E%0A%3Cp%3EJust%20last%20month%2C%20security%20camera%20footage%20of%20men%20violently%20attacking%20and%20stabbing%20an%20employee%20at%20a%20mini-market%20went%20viral.%20The%20store%E2%80%99s%20employees%20had%20engaged%20in%20a%20verbal%20altercation%20with%20the%20men%20who%20had%20come%20to%20enforce%20an%20order%20to%20shutter%20shops%2C%20following%20the%20announcement%20of%20a%20municipal%20curfew%20for%20Syrian%20refugees.%3Cbr%3E%E2%80%9CThey%20thought%20they%20were%20Syrian%2C%E2%80%9D%20said%20the%20mayor%20of%20the%20Nahr%20el%20Bared%20municipality%2C%20Charbel%20Bou%20Raad%2C%20of%20the%20attackers.%3Cbr%3EIt%20later%20emerged%20the%20beaten%20employees%20were%20Lebanese.%20But%20the%20video%20was%20an%20exemplary%20instance%20of%20violence%20at%20a%20time%20when%20anti-Syrian%20rhetoric%20is%20particularly%20heated%20as%20Lebanese%20politicians%20call%20for%20the%20return%20of%20Syrian%20refugees%20to%20Syria.%3Cbr%3E%3Cbr%3E%3C%2Fp%3E%0A
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What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
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