|01-15-2015, 10:46 PM||#1|
Saudi`s Al Rajhi Bank profit slumps for sixth consecutive quarter, dividend cut
Al Rajhi Bank, Saudi Arabia`s second-largest lender, fourth-quarter net profit fell 1.8% from a year ago, trailing analysts` median forecast. That was sixth-straight quarterly drop in profit.
Shares of Al Rajhi were down more than 2% in the opening minutes on Thursday as the Sharia-compliant institution posted lower-than-expected profit for the fourth quarter of 2014. The bank said it made 1.52 billion riyals in the three months to December 31, compared with 1.55 billion riyals in the same period a year ago.
The decrease in the bank`s quarterly profit was attributed to lower total operating income due to the challenging macroeconomic environment, as the ongoing weakness in the retail markets continue to hammer loan growth amid the fierce competition between the Saudi banks and its rivals.
Total operating income fell 12.9% to 3.09 billion riyals.
The Kingdom`s central bank published new consumer lending rules last September. The weakness in profit was also attributed to these new regulations, which have somewhat hurt retail lending at individual banks and capped fees that banks can charge.
Al Rajhi Bank cut its dividend for the second of 2014 to 0.75 riyals/share from 1.00 riyals per share.
Meanwhile, Saudi banks continue to post strong fourth-quarter results. However, preliminary issues point to declining trend in interest and non-interest incomes.
Al Rajhi is one of the biggest market movers on the benchmark Tadawul All Share Index, having the biggest weight by nearly 10%, therefore, any sharp decline will hurt the Saudi benchmark.
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