{"id":86935,"date":"2024-06-06T00:00:00","date_gmt":"2024-06-06T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2024\/06\/06\/top-10-banks-saw-strong-earnings-in-the-first-quarter-of-the-year\/"},"modified":"2024-06-06T00:00:00","modified_gmt":"2024-06-06T00:00:00","slug":"top-10-banks-saw-strong-earnings-in-the-first-quarter-of-the-year","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2024\/06\/06\/top-10-banks-saw-strong-earnings-in-the-first-quarter-of-the-year\/","title":{"rendered":"Top 10 banks saw strong earnings in the first quarter of the year"},"content":{"rendered":"

The Kingdom\u2019s top 10 banks turned in solid results in 1Q <\/strong>2024:<\/strong> Local lenders\u2019 combined operating income grew 3.8% q-o-q to SAR 34.1 bn in the first quarter of this year, mainly on the back of 23% q-o-q growth in fee and non-core income, according to a quarterly report by global consulting firm Alvarez & Marsal\u2019s (A&M) Saudi Arabia Banking Pulse (pdf)<\/a>. The increase was supported by higher cost efficiency and a decline in operating expenses, as the cost-to-income ratio fell 1.4% q-o-q. On an annual basis, combined operating income was up 4.9% y-o-y. <\/p>\n

The methodology:<\/strong> A&M\u2019s Banking Pulse analyzes data from the 10 largest listed banks in Saudi and compares their financial performance on a quarterly basis. It looks at their size, liquidity, income, operating efficiency, risk, and capital. The banks include Saudi National Bank (SNB), Al Rajhi Bank, and Riyad Bank, among others.<\/p>\n

By the numbers: <\/strong>Total deposits grew 5.9% q-o-q mainly driven by an 8.2% hike in current account savings accounts. Overall, loans and advances grew by 3.5% q-o-q, a faster increase compared to 4Q 2023. <\/p>\n

Meanwhile, net interest margins (NIM) fell 6 basis points q-o-q to just under 3%.<\/strong> Out of the 10 surveyed banks, seven reported a downtick in NIM \u2014 local banks\u2019 main driver of growth in FY 2023<\/a>. Yield on credit lost 7 basis points q-o-q while cost of funds remained essentially unchanged. <\/p>\n

The outlook: <\/strong>\u201cWhile SAMA continues to follow US Fed with respect to the benchmark interest rates, we expect higher interest rates will constrain mortgage lending growth in FY 2024. A downward rate adjustment is being predicted in the second half though both the timing and the size of the cuts have gone through many predictive revisions; nevertheless, lower rates are likely to gradually affect margins; banks will need to increase their focus on fee and transactional banking income. We also can expect a continued focus on costs throughout 2024, Asad Ahmed, Managing Director and head of ME financial services at A&M said in a press release<\/a>. <\/p>\n","protected":false},"excerpt":{"rendered":"

The increase was supported by a decline in operating expenses<\/p>\n","protected":false},"author":1,"featured_media":86936,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2617],"tags":[1553,19,285,10],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-86935","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-alvarez-marsal","tag-banking","tag-earnings-watch","tag-enterpriseam-ksa","wpautop","entry"],"acf":{"mongo_id":"59a168b5-82a4-402c-82b0-171a1a8dc891","order":"8","is_powered_by":false,"story_type":"1","photo_url":"https:\/\/ent.news\/2024\/3\/1577.jpg","photo_position":"above","homepage_title":"","full_issue_title":"Saudi\u2019s 10 largest banks saw strong earnings in the first quarter of the year","related_issue":[86920],"teaser":"The increase was supported by a decline in operating expenses","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2024\/6\/.bdd54312-50d4-48ec-bb71-fa7a9399415e.mp3"},"yoast_head":"\nTop 10 banks saw strong earnings in the first quarter of the year - 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