SABB incurs net loss of SAR 4.84 bln in 9M 2020

Saudi British Bank (SABB) reported a net loss of SAR 4.8 billion for the first nine months of 2020, against a net profit of SAR 2 billion a year earlier.

The nine-month figures were hit by goodwill impairment of SAR 7.41 billion recorded in the current period, following the merger of SABB-Alawwal bank in June 2019.

SABB’s net income before Zakat and income tax was lower by SAR 134 million due to higher operating expenses, on higher depreciation and amortisation, salaries and employee related expenses and general and administrative expenses to support the merger integration of the two banks.

The third quarter net profit dropped 10% to SAR 1 billion in Q3 2020, compared to SAR 1.17 billion a year earlier, on lower total operating income, which was partially offset by a decrease in total operating expenses and provision for Zakat and income tax.

On a sequential basis, the bank reported positive results, compared to a net loss of SAR 6.87 billion in Q2 2020, driven by goodwill impairment of SAR 7.41 billion recorded in the previous quarter.

Setting aside the one-off impact of the goodwill impairment, the net income before Zakat and income tax was higher by SAR 1.06 billion, thanks to lower credit loss provision.