Fourth quarter profits of $380m might be something to be celebrated – particularly given the state of the global economy. But Al-Rajhi Bank, the Gulf’s biggest bank, said last week that its profits of SR1.4bn had been depressed by higher provisions and were almost 10 per cent lower than a year earlier.
At the same time, Samba Financial Group, another prominent Saudi bank, reported a 13.5 per cent decrease in fourth quarter earnings.
In October, as global recession loomed and credit from international banks dried up, the Saudi government injected $3bn into banks to finance private sector projects and help the lenders cope with a tightening local currency money market. It has also twice dropped reserve requirements on demand deposits to 7 per cent.
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