SABB’s non-performing loan ratio down to 2% in Q1 2023: CEO

Tony Cripps, CEO of Saudi British Bank (SABB)

Saudi British Bank’s (SABB) non-performing loans (NPLs)-to-total loan portfolio declined to reach 2% by the end of the first quarter of 2023, compared to 2.3% at the end of last year, the bank’s CEO Tony Cripps said in an interview with Al Arabiya TV.

Cripps added that most of the increase in provisions during Q1 2023 resulted from restarting the bank's models on interest rate assumptions and the work environment, to hedge against possible fluctuations, mainly since the situation has recently been more volatile.

Based on the new data, more provisions were set aside in anticipation of the possibility that the work environment would be more volatile in the latter part of the year, he explained.

The CEO stressed that this is the reason for doing this review, which is not explicitly driven by the names of specific customers, but is the result of the models developed by the bank, as it is against the loan portfolio.

He also pointed out that the market value of the investment portfolio improved during Q1 2023, as its losses fell to about SAR 600 million, which represents a small percentage compared to capital.

SABB reported nearly SAR 1.2 billion losses on the market value of the investment portfolio by the end of 2022, as it maintains fixed-return instruments, in addition to the high-interest rates at the time.

He pointed out that the bank decided during the last quarter of 2022 to increase investment in treasury bonds after US treasury yields peaked; therefore, the investment portfolio witnessed an improvement in its market value, as bond yields fell recently as a result of some fluctuations in the banking system.

According to data compiled by Argaam, SABB reported a net profit of SAR 1.76 billion in Q1 2023, a 76% increase year-on-year (YoY) from SAR 1 billion in Q1 2022.