The net profit of the 10 Saudi-listed banks declined by 0.3% quarter-on-quarter (QoQ) to 17.4 billion Saudi riyals ($4.64 billion) in Q2 2023, investment firm Alvarez & Marsal said in a report titled Saudi Arabia (KSA) Banking Pulse for Q2 2023.
 
“We expect banks to face a slowdown in credit growth with moderate pressure on the loan book due to the challenging economic environment,” the report said.
 
The country’s 10 largest listed banks analysed were Saudi National Bank, Al Rajhi Bank, Riyad Bank, Saudi British Bank (SABB), Banque Saudi Fransi, Arab National Bank, Alinma Bank, Bank Albilad, Saudi Investment Bank and Bank Aljazira.

Impairment cost fell 23.3% QoQ, but operating expenses rose by 2.2% QoQ, leading to a marginal increase in net income.
 
Operating income slipped by 0.7% QoQ, driven by flat net interest income growth and a decline in non-core income by 3.2% QoQ.
 
Return on equity decreased by 21 basis points QoQ to 14.9%, while return on assets remained stable at 2%.
 
However, loans and advances grew by 2.6% QoQ while deposits growth moderated to 1.7% QoQ.
 
The cost of risk improved by 13 basis points QoQ to settle at 0.4% in Q2 as aggregate impairment charges declined by 23.3% QoQ. Nine out of the top 10 banks reported an improvement in the cost of risk.
 
(Editing by Seban Scaria seban.scaria@lseg.com)