Saudi Arabia's National Commercial Bank, the biggest lender in the kingdom by assets, posted a 2.1 per cent increase in its first quarter net income due to a rise in net special commission and fee income, which helped the lender offset an increase in impairment charges.
Net profit for the three-month period ending March 31 climbed to 2.8 billion riyals (Dh2.74bn), NCB said in a bourse filing to Tadawul stock exchange, where its shares trade. NCB’s quarterly profit was below EFG Hermes’ forecast of 2.4bn riyals and FAB Securities’ 3.3bn riyals projection.
The lender said its total operating income increased 7.2 per cent to 5.3bn riyals, buoyed by a 6.9 per cent jump in proceeds from special commissions while income from financing and investment reached 4bn riyals.
A rise in fees from banking and services and foreign exchange income was partially offset by an increase in other operating expenses, it noted.
However, “net impairment charge for expected credit losses”, climbed 173 per cent at the end of the first quarter to 396 million riyals, NCB said.
Like their global counterparts, lenders in the Gulf countries are seeing a rise in provisioning for bad loans as they set aside funds for expected credit losses amid a coronavirus-induced economic slowdown. Margins are under pressure as loan growth slows and interest rates plunge as the pandemic disrupts the global economy.
Last month, the International Monetary Fund forecast the global economy would shrink 3 per cent this year, sliding into the deepest recession since the Great Depression of the 1930s. The outlook for global output is worse than the 2008 global economic crisis, according to the Washington-based lender.
Despite economic headwinds, NCB said its assets at the end of the reporting period rose 15 per cent to 535bn riyals. The bank's investments climbed 7.8 per cent to 133bn riyals, while customer deposits also increased 21 per cent to 375.2bn riyals.
Meanwhile, Samba Financial Group, reported a more than 19 per cent rise in its net profit to 1.3bn riyals, the lender said in a separate bourse filing to Tadawul on Sunday.
Its quarterly operating profit jumped 10.7 per cent to 2.4bn riyals.
Samba attributed the rise in operating income to “gains on FVOCI [fair value other comprehensive income] debt, exchange income and other operating income, [which was] partially offset by increase in zakat and taxation expense for the quarter”.
Samba said its assets at the end of March rose 15.5 per cent year-on-year to 267.1bn riyals, while its investments climbed 20 per cent to 91.4bn riyals for the period.
FFP EXPLAINED
What is Financial Fair Play?
Introduced in 2011 by Uefa, European football’s governing body, it demands that clubs live within their means. Chiefly, spend within their income and not make substantial losses.
What the rules dictate?
The second phase of its implementation limits losses to €30 million (Dh136m) over three seasons. Extra expenditure is permitted for investment in sustainable areas (youth academies, stadium development, etc). Money provided by owners is not viewed as income. Revenue from “related parties” to those owners is assessed by Uefa's “financial control body” to be sure it is a fair value, or in line with market prices.
What are the penalties?
There are a number of punishments, including fines, a loss of prize money or having to reduce squad size for European competition – as happened to PSG in 2014. There is even the threat of a competition ban, which could in theory lead to PSG’s suspension from the Uefa Champions League.
UAE currency: the story behind the money in your pockets
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The specs
Engine: 3.9-litre twin-turbo V8
Power: 620hp from 5,750-7,500rpm
Torque: 760Nm from 3,000-5,750rpm
Transmission: Eight-speed dual-clutch auto
On sale: Now
Price: From Dh1.05 million ($286,000)
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
The schedule
December 5 - 23: Shooting competition, Al Dhafra Shooting Club
December 9 - 24: Handicrafts competition, from 4pm until 10pm, Heritage Souq
December 11 - 20: Dates competition, from 4pm
December 12 - 20: Sour milk competition
December 13: Falcon beauty competition
December 14 and 20: Saluki races
December 15: Arabian horse races, from 4pm
December 16 - 19: Falconry competition
December 18: Camel milk competition, from 7.30 - 9.30 am
December 20 and 21: Sheep beauty competition, from 10am
December 22: The best herd of 30 camels
Global state-owned investor ranking by size
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United States
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2.
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China
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3.
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UAE
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4.
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Japan
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5
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Norway
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6.
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Canada
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7.
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Singapore
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8.
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Australia
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Saudi Arabia
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10.
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South Korea
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Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
