Riyadh, Saudi Arabia — Saudi Arabian Al Rajhi Bank reported a marginal decline in H1 2023 net profit to SAR 8.29 billion ($2.29 billion) from SAR 8.39 billion in the year-ago period.
In a Tadawul disclosure, Al Rajhi Bank said net income decreased due to a decrease in total operating income by 3.5 percent, triggered by a decrease in net financing and investment income, while there was an increase in exchange income, fees from banking services, and other operating income.
In contrast, the total operating expenses including impairment charges for financing decreased by 8.2 percent due to a decrease in other general and administrative expenses, while there was an increase in salaries and employees’ related benefits, and depreciation expense.
There was a decrease in impairment charge for financing from SAR 1.15 billion to SAR 719 million by 38 percent.
The bank reported a 3.5 percent year-on-year (YoY) decline in operating income. This is primarily attributed to a drop in net financing and investment income. Al Rajhi Bank reported an increase in fees from banking services, foreign exchange (FX) income, and other operating income.
On the other hand, operating expenses declined, including impairment charges for financing, by 8.2 percent YoY, due to a decrease in other general and administrative expenses. However, the bank recorded an increase in salaries and employee-related benefits, and depreciation expenses. Impairment for credit losses dropped by 38% YoY from SAR 1.15 billion to SAR 719 million.
The second-quarter net profit declined 3 percent to SAR 4.15 billion from SAR 4.25 billion in Q2 2022, as operating income dropped by 4.5 percent YoY on lower net financing and investment income.
The net profit increased marginally 0.1 percent from SAR 4.14 billion in Q1 2023, backed by a 0.7 percent rise in operating income.
Total shareholders’ equity, no minority interest, increased to SAR 86.68 billion as of June 30, 2023, from SAR 75.41 billion a year earlier.