Al Rajhi bank records SAR 1bn provisions in Q4 and writes off SAR 2.7bn of bad debts

The detailed financial statements of Al Rajhi bank, the largest listed Saudi bank in terms of assets, showed the greatest provisions formation in the bank’s history of more than SAR 2600m compared to SAR 2319m of 2012 with an increase of 13%.

This increase in provisions is caused by the increased provisions of Q4’s amounting to SAR 1bn which affected the bank’s profitability for the same period reaching its lowest quarterly profits since 2009.
 

The bank’s provisions for 2013 included SAR 426m provision for decrease in investments value compared to SAR 22m in 2012.
 

The bank, on the other hand, has written off SAR 2.7bn of bad debts with 146% increase than last year which will contribute to reducing the non-performing loans value to SAR 3bn compared to SAR 3.5 for 2012.

This led to raising the provisions coverage ratio of the non-performing loans to reach 144% compared to 137% in 2012.

     
It’s noteworthy that the bank’s profits fell by 6% in 2013 compared to 2012 due to the increased allocated provisions, increase in operating expenses and the decrease in financing and investment income margins.
  
The bank, in return maintained its assts growth to reach SAR 280bn while the customers’ deposits reached more than SAR 230bn.