Mixed fortunes for Saudi banks

Results from banking groups in Saudi Arabia have revealed mixed fortunes in the kingdom.

While the kingdom's largest bank, National Commercial Bank (NCB), reported a leap in profits of almost 30%, Al-Rajhi Banking and Investment Corporation (Arabic) saw a 22% fall.

Arabic, the kingdom's second largest bank, blamed unfavourable world conditions for the drop in profits.

The bank has experienced difficulties this year after becoming involved in the Enron collapse in the US, and being named in a lawsuit filed by victims of September 11.

US connections?

Arabic and its rival Saudi American Bank (Samba) both reported falling profits in the fist nine months of 2002, possibly the result of the tensions with the US.

The managing director of Samba, which saw profits fall by 15% fall, said this was the result of fewer special commissions such as charges for banking services and commission.

But the bank, the third largest in the Saudi kingdom, was named in a newspaper report earlier this year as being one of the banks boycotted by Saudi investors because of its US connections.

Samba is 22.8% owned by US-based Citibank.

Arabic meanwhile was listed on the list in a $1,000bn lawsuit filed by families of September 11 victims as having contributed financially to the terror attacks.

Good news

There was better news from Saudi's leading bank, NCB, which reported a 29.9% increase profits for the first nine months of 2002.

The group announced a record 486% increase in the sale of investments and its chairman Abdullah Bahamdan attributed the rise in profits to better commission income and banking charges.

Meanwhile Saudi Investment Bank (Saib) reported a record profit, up 24% on the year before, while Saudi Hollandi Bank said profits had lifted by 15%.

Saib said its profits were boosted by a 10% increase in customer deposits.