Provisions, lending weaken Saudi banks Q2 earnings | Reuters

HSBC's (HSBA.L) Saudi affiliate SABB bank (1060.SE) missed forecasts and two other banks in the kingdom reported sharp falls due to high provisions to counter exposure to troubled Saudi firms and a slowdown in lending.

The second quarter results for SABB, Arab National Bank 1080.SE (ANB), and Saudi Investment Bank 1030.SE (SAIB) on Monday reflect a challenging period for the region's banks as they struggle to cover loan losses in a flat market still reeling from the global financial crisis.

Saudi lenders had a difficult year in 2009 with profitability eroded by a doubling of provisions for non-performing loans to almost 11 billion riyals as a rising number of Saudi and regional firm ran into financial problems.