Saudi's Riyad Bank Q2 net profit down 26% on bad debt charges

19/07/2017 11:35 AST

Riyad Bank , Saudi Arabia's fourth-largest lender by assets, posted a 26 percent decline in second-quarter net profit on Wednesday, missing analysts' forecasts, as the bank booked higher impairment charges.

The bank made 848 million riyals ($226.13 million) in the three months to June 30, down from 1.15 billion riyals in the same period of 2016, it said in a bourse filing.

Three analysts polled by Reuters had on average forecast the bank's quarterly profit would be 1.03 billion riyals.

The bank cited higher operating expenses due to an increase in impairment charges for credit losses for the reduction in net income

Saudi companies issue brief earnings statements early in the reporting period before publishing more detailed results later.

The kingdom's banks are facing a challenge time as growth in lending and deposits is constrained by sagging oil prices, which has weighed on spending by the government, companies and consumers.

Riyad Bank has reported flat or lower profits in eight of the last nine quarters.

Operating income for the second quarter fell by 2.1 percent on the corresponding period of 2016 to 1.98 billion riyals. Profits from special commissions increased 8.3 percent to 1.47 billion riyals in the three months to June 30 from a year earlier, it said.

Loans and advances for the six months till the end of June stood at 141.18 billion riyals, falling 8.7 percent on the same point of 2016, while deposits dipped 4.3 percent to 156.98 billion riyals over the same period. ($1 = 3.7500 riyals)

Reuters