6 Saudi Banks' Q3 Profits Rise 5.3% to $5.3 Billion

The Saudi banking sector kicked off the third-quarter earnings season on a high note, as six banks recorded a combined profit of 19.83 billion riyals ($5.29 billion), up 5.3% from the comparative period, according to an analysis by "Arab News" titled "Saudi banks’ Q3 profits rise 5.3% as 6 lenders earn $5.3bn", based on the banks' results published on the Saudi Stock Exchange (Tadawul).

Four of the six banks recorded annual profit growth: Al Rajhi, Bank AlJazira, Riyad Bank, and Arab National Bank, while the profits of Saudi National Bank and Alinma Bank declined slightly.

Al Rajhi Bank achieved the highest quarterly profit among the six banks at 7.11 billion riyals, an 11.7% increase, driven by growth in net financing and investment income, while Bank AlJazira recorded the fastest growth rate at 17.9%, reaching a profit of 471.6 million riyals, as its financing portfolio expanded 14.4% to 123.37 billion riyals—the fastest among the six banks.

Saudi National Bank's profit declined 0.3% to 6.45 billion riyals despite a 2.2% rise in operating income to 10.37 billion riyals. The bank attributed the decline mainly to higher operating expenses and provisions for expected credit losses. Pre-provision expenses rose 9%, while provisions surged to 323 million riyals from 231 million riyals a year earlier. Riyad Bank recorded a 6.6% profit growth to 2.87 billion riyals, Arab National Bank grew 1.7% to 1.35 billion riyals, while Alinma Bank's profit fell 0.2% to 1.59 billion riyals.

The total financing portfolios of the six banks reached approximately 2.5 trillion riyals by the end of September, a 5.4% year-on-year increase, while their combined profits for the nine-month period rose 7.7% to 58.79 billion riyals. Ahmed Shreim, a global capital markets expert, told "Arab News" that the divergence "reflects a natural variation in the business mix rather than sector-wide concern," adding that "the clearer indicator is the cost of risk alongside loan growth and the non-performing loan ratio, not the provision figure alone."

What do these terms mean?

Third Quarter: A three-month period extending from July to September, after which companies announce their financial results.

Net Profit: What remains of revenue after deducting all expenses, costs, and taxes.

Provisions for Expected Credit Losses: An amount set aside by banks to cover loans that customers might fail to repay.

Financing Portfolio: The total loans and financing facilities granted by a bank to its customers.

Cost of Risk: The ratio of expected losses from lending relative to total loan volume, measuring the cost of potential customer default.