Alinma Bank sets SAR 800 mln for NPL provision in Q2, says CEO

Alinma Bank has increased provision for non-performing loans (NPL) in the second quarter to SAR 800 million from SAR 500 million in the same period last year, to deal with potential bad debts, the lender’s CEO Abdul Mohsen Al-Fares told al-Arabiya television in an interview.

The move takes NPL provisioning to 209 percent in the second quarter from 181 percent in the year earlier period, he added.

Alimna Bank’s second quarter profit was 18.5 percent higher year-on-year at SAR 365 million on higher operating income and growth in its core activities.

The number of Alinma branches has risen to 109 in the first half of this year, from 95 in the same period last year, which has contributed to the rise in profit, he added.

The bank has not subscribed to the SAR 15 billion sovereign bonds issued by the Saudi government last week because it is keen on maintaining its operations shariah-compliant, Al-Fares said.

He pointed out that the size of the issuance was very small relative to the size of the potential market and there need to be more bond issues so as to expand the secondary bond market.