Alawwal Bank’s Q1 profit hit by higher expenses, provisions, says CFO

Alawwal Bank’s first quarter earnings were hit by higher operating expenses, increased provisions and a rise in rental costs, chief financial officer, Abdullah Aloraini told Al Arabiya TV.

Aloraini denied the bank’s figures were hurt by the restructuring of the retail loan portfolio which was carried out through 2016 and Q1-2017.

The higher provisioning last year was due to the economic and credit changes in the kingdom, as the bank saw a jump in the non-performing loans in 2016 and Q1 2017, he said.

Alawwal Bank (formerly Saudi Hollandi Bank) reported a net profit of SAR 324 million for the first quarter of 2017, down by 36.6 percent year-on-year (YoY). On a sequential basis, the lender swung to a net profit, compared to a net loss of SAR 249.3 million the previous quarter.

The Saudi-based lender posted robust gross operating income for the first quarter of 2017, when compared to the same period last year, driven by strong operations, he said.

However, the lender saw a slump in loan portfolio due to the economic slowdown in the kingdom. Corporate loans steeply declined in H2 2016 through Q1 2017, while retail credit operations remained flat during the same period.