Riyad Bank, Saudi Arabia's fourth-largest lender by assets, posted a 65.6 percent fall in fourth-quarter net profit on Monday, falling well short of analysts' forecasts.
The bank made 293 million riyals ($78 million) in the three months to December 31, down from 851 million riyals in the same period of 2015, it said in a bourse filing.
Three analysts polled by Reuters had on average forecast the bank's quarterly profit would be 780 million riyals.
The bank cited a 47.9 percent rise in operating expenses mainly due an increase in impairment charges for credit losses. The cost rise was partially offset by a drop in salaries and other employee-related expenses.
Meanwhile, operating income dropped because of a fall in fees and commissions, although that was partially offset by higher gains on trading investments.
Saudi companies issue brief earnings statements early in the reporting period before publishing more detailed results later.
It was the sixth quarter in the last seven in which Riyad Bank reported either declining or flat profits, highlighting the challenges the kingdom's banks face as growth in lending and deposits is constrained by sagging oil prices, which have dampened spending by the government, companies and consumers.
The bank said on January 4 that its board had proposed paying a cash dividend of 0.30 riyal per share for the second half of 2016. That was lower than the 0.35 riyal per share which the bank paid for the corresponding period of 2015.
Loans and advances at the end of December stood at 142.9 billion riyals, falling 1.5 percent from the same point of 2015, while deposits shrank 6.7 percent to 156.7 billion riyals.
Comments
Comments are closed for this article.