Saudi banks have recorded their “highest quarterly profits” ever, with combined earnings reaching SAR 19.5 billion, representing a 13% increase compared to Q2 of 2023.
Exceptional Performance
Saudi National Bank led the ten banks listed on “Tadawul” in terms of total profits from April to June, posting a net profit of approximately SAR 5.2 billion, growing 4% year-on-year.
Trailing right behind, “Al Rajhi Bank” secured the second position with a net profit of around SAR 4.7 billion, marking a 13.2% increase.
Riyad Bank came in third with a net profit of nearly SAR 2.3 billion, up approximately 18%.
So what
The combined profits of the banks reached around SAR 38 billion during the first six months of 2024, reflecting a 10.6% YoY increase.
Meanwhile, the boards of four listed Saudi banks decided to distribute cash dividends to shareholders for the first half.
Al Rajhi Bank topped the list in terms of per-share cash dividends, offering SAR 1.25 per share with total distributions of SAR 5 billion.
It was followed by “Banque Saudi Fransi” with a dividend of SAR 1 per share, totaling SAR 1.19 billion.
Saudi National Bank came next with SAR 0.90 per share, totaling SAR 5.4 billion.
Lastly, Riyad Bank distributed SAR 0.8 per share, amounting to SAR 2.39 billion.
Some context
Omar Bahlaiwa, Founder and President of Optimum Business Consulting Bureau (OBCB), explained that these banks are efficiently utilizing their deposits.
In an interview with “Al Arabiya Business,” he added that they are benefiting from the Kingdom’s massive projects.
Moreover, increased government spending has a “positive impact” on the market, particularly the banking sector, as liquidity circulation rates rise.
Now what
Fitch Ratings Agency expects the “strong profitability” of the banks to continue for the remaining months of this year.
The agency sees the operating environment for banks as still favorable, supported by government spending and oil prices.
The global agency estimated that the average growth of the real non-oil GDP will reach 4.5% in 2024–2025.
It was also predicted that Saudi banks will continue to grow at twice the average rate of Gulf Cooperation Council (GCC) countries.
This is expected to result in a financing growth rate of approximately 12% in 2024, compared to 11% in the previous year.
