Saudi’s Al Rajhi Bank first-half profit dragged down by 48.5% rise in impairment charges

Al Rajhi Bank on Thursday (July 23) reported 4.816 billion riyals ($1.284 billion) in profit for the first six months of the year, a 5.605% drop from the same period in 2019.

In a time of economic challenges amid the COVID-19 pandemic, credit impairments surged 48.5% to 1.151 billion riyals compared to the first half of last year, according to the bank’s filing with the Saudi stock exchange.

Most of these charges, 693 million riyals, were picked up in the first quarter.

For the six months through June 30, total operating expenses went up by 15.2%, mainly from a rise in salaries and employees’ related benefits, said the bank.

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Customer deposits grew a healthy 11.346% year-on-year to 334.665 billion riyals.

Al Rajhi earned 274.928 billion riyals from its financing and investment portfolio, a 15.275% increase compared to the first six months of 2019.

The bank’s assets reached 417.684 billion riyals, from 384.09 billion riyals at the end of 2019.

Al Rajhi said in April it was “difficult for the bank to determine the size and extent of the financial impact” of the COVID-19 precautionary measures and said its “financial soundness indicators are strong and able to stand the current economic challenges”.

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