January 29, 2020 / 7:51 AM / 25 days ago

UPDATE 1-Saudi lender NCB reports 18.8% rise in 2019 net profit

(Updates with quarterly breakdown)

DUBAI, Jan 29 (Reuters) - Saudi Arabia’s National Commercial Bank (NCB), saw a 13.2% rise in fourth-quarter net profit, according to Reuters calculations, helped by increased revenue from commissions and financing, and lower operating costs.

The country’ largest lender made a net profit of 3 billion riyals ($799.8 million)in the three months to Dec. 31, up from 2.65 billion riyals in the same period of 2018, Reuters calculated from financial statements in the absence of a quarterly breakdown.

NCB’s 2019 net profit was 11.4 billion riyals, up from 9.59 billion riyals in the same period a year earlier.

The profit was above the 10.3 billion riyals average net profit forecast of analysts polled by Refintiv.

The bank said total operating income was up 8.9% due to an increase in net special commission income, investment-related income and lower operating expenses.

Saudi banks have benefited from an increase in lending to state-backed projects and mortgages, as the non-oil economy shows signs of recovery.

The government expects real GDP growth at 2.3% in 2020, up from 0.4% in 2019.

NCB and Riyad Bank, the country’s fourth-largest lender, ended talks over a potential merger in December, which was expected to create a combined bank holding $183 billion in assets and to further extend NCB’s lead over its closest rivals, including Al Rajhi Bank, by boosting its assets by almost a third to 685 billion riyals.

“The boards of both banks have decided to end preliminary merger talks and not to continue with the merger study,” the two said in separate stock exchange filings, the two banks said in a filing on Dec. 16.

$1 = 3.7511 riyals Reporting by Saeed Azhar and Hadeel Al Sayegh; Editing by Shounak Dasgupta and Louise Heavens

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