Three Factors Drive Record Profits for Saudi Banks

The National Commercial Bank (NCB) continued to hold the largest share of the total net profits among banks listed on the Tadawul (AFP)
The National Commercial Bank (NCB) continued to hold the largest share of the total net profits among banks listed on the Tadawul (AFP)
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Three Factors Drive Record Profits for Saudi Banks

The National Commercial Bank (NCB) continued to hold the largest share of the total net profits among banks listed on the Tadawul (AFP)
The National Commercial Bank (NCB) continued to hold the largest share of the total net profits among banks listed on the Tadawul (AFP)

Saudi banks posted their highest-ever quarterly profits in Q2 2024, with net earnings up 13% from the same period last year.

Analysts attribute this boost to three main factors: a rebound in lending and financing, increased deposits, and lower credit provisions. They expect this strong performance to continue in future quarters.

The ten listed Saudi banks reported a 13% rise in net profits, reaching SAR19.54 billion ($5.2 billion) for Q2 2024, up from SAR17.27 billion ($4.6 billion) in Q2 2023.

The National Commercial Bank (NCB) led with the highest share of profits, earning SAR5.23 billion, a 4.3% increase from the previous year. Al-Rajhi Bank came second with SAR4.69 billion, a 13.2% rise year-on-year.

Riyad Bank reported SAR 2.33 billion in profits for Q2 2024, a 17.93% increase from the same quarter last year. Alawwal Bank saw the highest growth rate, with profits up over 30% to SAR 2.02 billion.

Thamer Al-Saeed, Head of Asset Management at Rasana Financial, cited three key reasons for the record profits: The return of active lending, increased deposit volumes, and reduced credit provisions. He believes these trends will continue to boost bank profits in the coming quarters.

Mohamed Hamdy Omar, CEO of G-World, noted that the banking sector is likely to see further profit growth due to rising income from commissions and loans.

He highlighted the positive outlook for the sector, driven by ongoing projects and government initiatives to support business and infrastructure development in Saudi Arabia.



GASTAT: Saudi Industrial Production Index Rose 1.6% in July

The General Authority for Statistics (GASTAT) data
The General Authority for Statistics (GASTAT) data
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GASTAT: Saudi Industrial Production Index Rose 1.6% in July

The General Authority for Statistics (GASTAT) data
The General Authority for Statistics (GASTAT) data

The General Authority for Statistics (GASTAT) in Saudi Arabia said on Tuesday that Industrial Production Index (IPI) rose by 1.6% in July this year compared to the same month in 2023.

The growth was attributed to heightened activity in the manufacturing industry, electricity, gas, steam, and air conditioning supply activities, as well as water supply, sewerage, waste management, and remediation activities, GASTAT said in a bulletin on the results of IPI for July 2024.

The report also highlighted a 4.6% increase in the sub-index for manufacturing activity compared to July 2023. Conversely, the sub-index for mining and quarrying activities decreased by 0.8% in July 2024.

The sub-index for electricity, gas, steam, and air conditioning supply activity showed a notable 8.2% increase, while the sub-index for water supply, sewerage, waste management, and remediation activities saw a growth of 1.1% over July 2023.

Data revealed a 1.1% decrease in the index for oil activities in July 2024, along with an 8.2% increase in non-oil activities, compared to the same period the previous year.
IPI is an economic indicator that tracks the development and relative changes in the volume of industrial production quantities. This data is derived from the Industrial Production Survey, conducted among a sample of industrial establishments involved in mining, manufacturing, electricity and gas supply, water supply, sanitation, waste management, and remediation activities.