DUBAI (Reuters) - Saudi British Bank 1060.SE (SABB), the kingdom’s sixth-largest lender by assets, posted a 9.3 percent drop in first-quarter net profit, meeting analysts’ forecasts as operating expenses rose.
The bank, an affiliate of HSBC Holdings (HSBA.L), said on Wednesday it made 1.04 billion riyals (£221.85 million) in the three months ended March 31, compared with 1.14 billion in the same period a year earlier, according to a bourse filing.
Three analysts surveyed by Reuters had on average expected the bank to post a net profit of 983.14 million riyals.
The bank attributed the drop in net profit primarily to higher operating expenses, which rose 19.7 percent as a result of a rise in provisions for credit losses and impairments of other assets.
Saudi companies issue brief earnings statements early in the reporting period before publishing more detailed results later.
Operating income for the quarter rose 1.6 percent to 1.82 billion riyals, while profit from special commissions increased 12 percent to 1.25 billion riyals.
Lower government spending as a result of reduced oil prices has created headwinds for banks, leading to lower net interest income and, in some cases, a rise in provisions for bad loans.
SABB’s loans and advances at the end of March stood at 119.49 billion riyals, falling 8.5 percent against the same point of 2016, while deposits dipped 6.8 percent to 141.57 billion riyals.
Reporting by Tom Arnold; Editing by David Holmes