Top 10 Saudi banks see 9.3% surge in Q3 net profit

Top 10 Saudi banks see 9.3% surge in Q3 net profit

The top 10 banks in Saudi Arabia witnessed robust growth in profitability as net profit increased 9.3 percent quarter-n-quarter (QoQ) resulting in a return on equity (RoE) of 14.8 percent in the third quarter (Q3) of 2022, a report said.

Profitability was underpinned by higher total interest income of 15.9 percent QoQ and lower impairment charges for the quarter of 15.4 percent QoQ, according to the latest Saudi Arabia (KSA) Banking Pulse for Q3 2022 released by leading global professional services firm Alvarez & Marsal (A&M).

In the third quarter, aggregate L&A grew by 2.9 percent QoQ and continued to outpace the growth in deposits 0.2 percent QoQ. The operating income increased by 4.9 percent QoQ, primarily driven by growth in total interest income mainly due to higher interest rates. The sector continued to see improvement in cost efficiency with decline in cost-to-income (C/I) ratio by 0.9 percent QoQ in Q3’22. The cost of risk (CoR) declined by 9bps QoQ to 0.4 percent due to reduction in impairment charges.

Furthermore, return on assets (RoA) improved 12bps QoQ as net profit grew faster than the underlying average asset base of 2.8 percent QoQ. In terms of asset quality, non-performing loans (NPL) / net loan