Saudi Arabian lender SNB reports more than 17% jump in second-quarter profit
SNB's shares jumped 1.8% at market open after the results, and have risen just over 10% since January.
The kingdom's biggest lender by assets said it made a net profit of 6.1 billion riyals ($1.63 billion) in the quarter ended June 30, higher than the 5.6 billion riyals analysts were expecting, and compared with 5.2 billion riyals in the year-earlier period.
SNB said the results were driven by higher net special commission income and operating income, in addition to lower net impairment charges for expected credit losses.
SNB said pre-provision credit was driven by strong credit quality and higher recoveries. Citi had expected SNB to report provisions.
"While SNB's results were largely ahead vs our (and Street) expectations, we see this as poor quality beat – driven largely by provision writebacks," Citi said in a note to clients.
On a pre-provision basis, results were slightly below Citi's estimates, Citi said in the note, adding that the second-quarter results also showed weak net interest margins and muted loan volumes.
SNB will pay a first-half dividend after zakat, an Islamic tax, worth 1 riyal per share to 6 billion eligible shares, according to a separate bourse disclosure that followed the results.
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