Saudi banks' steady net interest income growth credit positive | ZAWYA MENA Edition

Saudi banks' steady net interest income growth credit positive | ZAWYA MENA Edition:

"During the first nine months of the year, Saudi Arabia’s 12 domestic banks’ net profits increased 3.2% year on year, mainly owing to rising net interest income and strong cost discipline, a credit positive, Moody’s Investor Service said in its bank sector comment this month.

The positive results were achieved despite lower government spending and slowing economic activity, with the real GDP seen to contract by 1% in 2017), which has led to negative lending growth and higher provisioning charges for most banks, the report said.

However, despite a 2% year-on-year decline in net loans as of September 2017, net interest income rose by 8% in the first nine months of the year, driven by a 20-basis-point improvement in the net interest margin, up to 2.9% for the first three quarters of 2017. Such improvement reflected a combination of higher asset yields and easing funding costs."



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